1. Meals – meals are deductible up to 50% of the costs but there must
have been a business purpose to the meal. Simply going to lunch during the
workday is not enough. For example, if you are meeting a client or a
vendor to discuss business matters this would likely suffice. Make sure
you note the purpose of the dinner, what was discussed, the day, time, and
amount of the dinner. Usually, the best place to write this information is
on the back of the receipt as much of the information is already on the
receipt such as date and time.
2. Mileage – Many entrepreneurs log a great deal drive time for
business. Make sure to keep track of the miles (non-commuting miles) so
you can take this very important deduction. Also, keep track of expenses
for the car. While you can only take either the mileage deduction or
actual auto expense deduction, it is best to know which may be more
advantageous for you.
3. Business accounts – Be sure to have separate bank accounts and credit
cards for you personally and the business. Aside from the legal reasons,
it also helps in showing a delineation between what is a business expenses
versus a personal one and, in the case of credit cards, affords you the
opportunity to deduct interest if you don’t pay your card off in full.
4. Keep accurate records – So to save time when preparing your taxes, be
sure to keep accurate records of the business expenses. This will help you
in the long run.
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