legalities of buying lunch

Discussion in 'Business Operations' started by Smitty58, Jun 24, 2006.

  1. Smitty58

    Smitty58 LawnSite Senior Member
    Posts: 531

    I've been buying lunch for my crew every day this year. Now my crew is me, my son ,and 1 other full time guy plus sometimes a 4th. I figure it is a nice perk to give my crew. Now after some thought and discussing this with my CPA, she tells me doing this everyday will create a IRS problem. Someone will have to claim the money spent as income. Either I claim it or the employees get a 1099 and have to claim it as income. The other option is to just increase their pay and they pay for their own lunch ,or of course just stop this practice all together. What do you do? Anyone have any knowledge of this problem?
     
  2. richallseasons

    richallseasons LawnSite Senior Member
    Posts: 479

    I try to limit how many times I pay for meals once or twice a week and my cpa can work it in somewhere but everyday you might as well stop or keep doing it and expect not to be a deduction,family or not these guys get paid and if they didnt work for you they would be expected to provide thier own lunch correct?
     
  3. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    You can only claim a 50% deduction on meals anyway.
     
  4. FLAhaulboy

    FLAhaulboy LawnSite Senior Member
    Posts: 852

    treat them to a nice lunch on friday. provided your paying them well, let them take over and pay for their own meals. perks are what help you keep good employees.
     
  5. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    I'm not sure on any of the particulars, but what I do know is claiming it isn't worth it.

    That's not just me, but from at least two other business owners I've spoken to, they all said the same thing...

    The first time around was 14-odd years ago, the consensus at the time was that a BIG meal (over 100 dollars) might be worth it as a one-time deduction (so not very often) but the kicker is it had to be a true business meal, meaning actual business was discussed and conducted over the course of said meal. Sure, for a few hundred bucks, maybe... But...

    Then many years later once I started, I tried it myself for a bit but soon wondered about this rigmarole so I asked another guy what the deal was... He told me he went so far as to do it for a whole year, he said he was able to deduct 100% as an expense, he said for me to keep in mind it's still not that much money because it's not like the IRS refunds you in the form of a check and so by the time he got done with the paperwork, he said he would've been way better off working lol.
     

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