For those with muliple crews - a tax question

Discussion in 'Business Operations' started by DFW Area Landscaper, Jul 6, 2007.

  1. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Messages: 2,116

    Ok guys, for those of you who manage the business and haven't actually mowed a lawn yourself in years, what percentage of gross sales do you target for meals and entertainment expense?

    I just pinned my accountant down on this and he says "I’d think in the 1% range wouldn’t raise concern". So I am like WAAAAY under budget but I will get there easily.

    In my business, we are 100% residential with no commercial clients to entertain or anything like that. Hoping to get a similar LCO's input.

    Is anyone pushing meals & entertainment to 1.5% or 2% of gross sales or even higher?

    DFW Area Landscaper
  2. z_clark

    z_clark LawnSite Senior Member
    Messages: 369

    1% is my "goal". Eat up :drinkup: entertain away!
  3. Bigray

    Bigray LawnSite Member
    Messages: 140

    imo, it would not matter if you were doing 10%, as long as you have the receipts, feel free /comfortable about deducting it. it is a legit deduction.
  4. rodfather

    rodfather LawnSite Fanatic
    Messages: 9,501

    It's not something I think about with over 200 mowing customers alone. Throw in all the fert, landscaping, snow plowing, etc. clients as well and maybe I will give it a second thought...maybe.
  5. bohiaa

    bohiaa LawnSite Fanatic
    Messages: 5,220

    this is where it gets tricky, I came from Dallas area, I'm now in Houston, from time to time I go back home, well if I wanted to I can write off my milage meals, hotel expense, and call it a business trip, who's to know if I didn't see a client, it's NOT the right thing to do. but it can be done.

    I try to keep mine at around 7to10%

    but I only purchase meals for employees, Ice, and items like mp3 players.
    MP3's ARE NOT writeoff per say. they can be given as gifts, or motavation items,
  6. bohiaa

    bohiaa LawnSite Fanatic
    Messages: 5,220


    take some cash and deposit it your Business account.....when they see that they will leave you alone........
  7. T.E.

    T.E. LawnSite Senior Member
    Messages: 799

    These type questions, or I leave to my accountant. What ever she is comfortable with should we get audited. The thing with receipts is to me something of a time bomb. What I mean is this. My old accountant before he got to feeble told me of an audit that one of his other clients was involved in. They presented the receipts for fuel, (I R S thought there was too much for fuel) the auditor slid the receipts back across the table, and said "PROVE" to me that the receipts are really fuel you bought. The point is they may try to make you prove that the receipts are for what you say they are for. I knew of a guy that would actually use other peoples receipts for his own. He is now is now in prison for other things. JMO, Tony
  8. bohiaa

    bohiaa LawnSite Fanatic
    Messages: 5,220

    correcton............. .07 to 1.0 %

  9. bohiaa

    bohiaa LawnSite Fanatic
    Messages: 5,220

    yea dirty pool, hate to say it, but I'm glad he's locked up, "it makes it cheaper on me.

    there are tons of ways to cheat, if you ever get started it's hard to keep up with, all the lies that is

    TJLANDS LawnSite Bronze Member
    Messages: 1,668

    I am almost at 2% for 2006. I am constantly out to lunch with contractors,( irrigation snow etc). I also go out to lunch with my lead people to discuss work issues. I have taken charters out fishing with employees and clients.
    Many rounds of golf with management companies, customers and employees. You can also write off trips to snow expos and green industry shows. Its a fun part of having your own business.
    And yes I have been audited both state and federal and the meals and entertainment were never an issue.

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