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Night on the town.. business expense?

Discussion in 'Business Operations' started by Lawn-Scapes, Mar 8, 2002.

  1. Lawn-Scapes

    Lawn-Scapes LawnSite Silver Member
    Messages: 2,810

    Just wondering..

    Has anyone taken a client (or potential client) out to dinner or anything like that?

    What qualifies it as a business expense? Do you need some sort of documentation?

  2. eggy

    eggy LawnSite Bronze Member
    Messages: 1,065

    That it ok, make sure you have recipts to show.
  3. Commander

    Commander Banned
    Messages: 116

    It becomes a business expense if... (drumroll please) you talk about business. Ie. what can you do for him/her, what does he/she need, etc.
  4. Pape's Landscape Maintenance

    Pape's Landscape Maintenance LawnSite Member
    Messages: 54

    Dittos to the other replies, one thing that we do also is fill out an expense statement that will indicate the function, the purpose of the meeting and who was in attendance then attach the receipt to it.
    It never hurts to have as much documentation as possible for the I.R.S. just in case, always show them that you have your ducks in order.
    Steve :cool:

    OBRYANMAINT LawnSite Senior Member
    Messages: 555

    this is a major grey area.......but generally give an explanation and don't push the envelope too much
  6. Lawn277

    Lawn277 LawnSite Member
    from Iowa
    Messages: 74

    I have taken a few clients out to lunch to discuss business topics, and saved all the reciepts,ect. When I sat down with my taxman. he gave it the big heave ho, just like my cell phone bill.( but that is another story). The expaination I got was that it raises a lot of red flags and the deduction was so low it wasnt worth my time to do the record keeping. And the Irs is the last visitor you want to come knocking at your front door,which I totally agree. I guess I am very conserevative in my deductable expenses. I dont have the time to keep up on the tax codes so thats why he gets the big bucks,so Ive got to believe him.

  7. fshrdan

    fshrdan LawnSite Member
    Messages: 142

    Lawn277, sounds like you should be shopping around for a more aggressive tax man!

    TSG, when you take clients or employees out to dinner, use a 'Promotional Expense' or 'Employee Relations' account instead of 'Meals', since meals is only 50% deductable.
  8. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488

    We do it all the time.
    In fact, we require our sales people to do it with major clients.

    OBRYANMAINT LawnSite Senior Member
    Messages: 555

    the cell phone should be a no brainer ....of course like you said there may be more to it than we know but you still may ask around to other accountants just to be sure

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