100% Deductible

Advertising event where you provide food to the public.

If you host an event, perhaps with a bouncy hut and popcorn and cotton candy to raise awareness of your business the cost of the food is 100% deductible. For more about financial business handling check this pay stub creator software.

Sale of food to the public

If you are selling food to the public the cost of the food is 100% deductible. Be aware though that you may need to capitalize inventory if your business is ongoing.

Snacks for the break room (de minimis)

This rule comes into play when expenses are so small, relative to the size of your business that tracking them would not be cost effective. If you occasionally buy doughnuts for the break room or for a staff meeting you are probably ok. Just be sure to keep it reasonable and keep receipts and records of the business purpose of your meetings.

Annual Company Party

If your company hosts an event for employees, like an annual picnic, the cost of the food is also 100% deductible. The key here is “occasional”. Be sure to keep receipts and note the reasons for the special event.

50% Deductible

The IRS says there are 2 situations where you can claim a 50% deduction on your meals.

Travel Status

The first is when you are so far from home that you need to sleep before coming back. This typically means that you spent the night at a hotel in the town you were visiting for business.

The second is meals as business-related entertainment.

If you take a client, potential client or even an employee out for a meal it can count as an entertainment expense. You must have a bonified business conversation and there should be “more than a general expectation of getting income or some other specific business benefit.”

When you record the cost of these meal and entertainment expenses simply record them at full value (they do need to be in their own category). Your tax person will adjust this to 50% when they prepare your taxes.

Not Deductible

If your meal doesn’t fall into one of these categories it probably, alas, is not deductible. If you are eating alone in your home town it’s probably going to be counted as a personal expense by the IRS. A question that I get a lot is “what if I am a traveling sales person? I’m in the car for most of the day so I have to eat out. Can I deduct those meals?” Sadly, unless you met with the client over lunch, it is probably 0% deductible.

Here is a small thing to keep in mind. Some people I talk to seem to feel like having their business pay for lunch is like getting free food. I’ll admit that if you’re not the boss then it seems like a pretty good deal. However, if you are the boss the deduction really doesn’t save you all that much. Let’s do an example:

If you are in the 30% tax bracket and take a potential client out to lunch and spend $40. You can only deduct $20 (50% rule) as a business expense. What’s the tax savings: $6. The idea here is that if you think taking a client out will help seal the deal go ahead. Just don’t expect to save money doing it. Still, if conducting business over meals is how your line of work is done be sure to account properly so that you can take the deductions your business deserves.

Where can you find more information?

https://www.irs.gov/publications/p463/  IRS publication 463 has the IRS rules about Travel, Entertainment, Gift, and Car Expenses. It is long and will dry your eyes out but, if you want information straight from the source, this is the place to get it.

https://www.irs.gov/publications/p463/ch01.html#en_US_2016_publink100033781 This link will take you straight to the section on meals. Again the rules are surprisingly complex and you’ll find that you need to bounce around a bit in the document to find all of the relevant information.

Remember that taxes can be tricky so talk to your accountant before making any big changes. You want to be sure that what you plan to do makes sense in the context of your specific business. If you have questions about this, or another accounting topic, please feel free to reach out to us. The sooner you do the sooner you can properly take advantage of the tax breaks that you deserve.

The post What About Meals? appeared first on Valiant Accounting.

One great and easy to use tool is Filter. To use this tool select one of the cells in the top row of your data. Next click on the Data tab at the top of the screen. Next click on the Filter button in about the middle of the ribbon. Your top row should now look like this.

By clicking on those little gray squares with the triangles you can do lots of useful things. You can sort the data into alphabetical order by Member Name or into chronological order by statement date. An even more useful feature is being able to filter down to just the information you want to see.

You may notice when you try to sort this data by date that things don’t seem to work out right. That is because Excel isn’t recognizing the dates as dates. It sees them as simple text. To fix this let’s add a column to the right of our data. In Column AB type “Statement Date 2″. Remember that when you add a new column you need to toggle the filter off and on. Otherwise the new data won’t sort with the old. In cell AB2 type “=datevalue(” then click on cell E2 and hit enter. Now select the date you just selected. In the bottom right corner of the cell you will see a little square. If you double click that square it will copy the formula down the rest of the page. You now have a column that will let you sort by date. (for practice you can do the same for the Policy Eff Date column)

Since I am running out of time to write this blog and I plan to cover these points in a class let me make a list of the other points I want to cover.

How to create a pivot table from the data

How to use conditional formatting to make certain data points pop out

How to Create a pivot chart to see progress over time.

If you’d like to see what it looks like at the end
here is an updated version

The post Using Excel with Sales Statements appeared first on Valiant Accounting.

In the first example above you could take $50,000, divide by the amount you earn from selling Product X, then divide that number by 52. That would get you there. But what if you wanted to know the number you would have to sell to make $45,000? Or another amount?

Let’s see how we could use goal seek to make this easy.

Now, in this simple example, you could simply keep changing the number of units until you have your target annual income achieved. Let me show you how Goal Seek gets you there faster.

First click on the Date tab at the top of your screen. Then select What-If Analysis

In the pull down menu select Goal-Seek

In the space next to “Set cell” type D6 (or highlight it and click on D6). This is where we want our desired income to be calculated. In “To value:” enter the amount you want to see in D6. In our example $50,000. In “By changing cell:” Enter D2. This is the variable we want the computer to change. In this case the number of units sold per week.

When you click OK the computer will then try several values until it either finds the value you are looking for or decides that one may not exist. You can then repeat this for as many different values as you desire.

If you would like to see the spreadsheet I created for this example you can download it here

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