100% Tax Deduction for Certain M&E Expenses!
What can I take as a tax deduction for meals and entertainment?
Generally, businesses are limited to deducting 50% of allowable meal and entertainment (M&E) expenses. But certain expenses are 100% deductible, including expenses:
- For food and beverages furnished at the workplace primarily for employees,
- Treated as employee compensation,
- That are excludable from employees’ income as de minimis fringe benefits,
- For recreational or social activities for employees, such as holiday parties, or
- Paid or incurred under a reimbursement or similar arrangement in connection with the performance of services.
If your company has substantial M&E expenses, you can reduce your tax bill by separately accounting for and documenting expenses that are 100% deductible. If doing so would create an administrative burden, you may be able to use statistical sampling methods to estimate the portion of M&E expenses that are fully deductible. For more information on how to take advantage of the 100% deduction, please Jim Komos at 216.831.7171 or jkomos@cp-advisors.com.
Why the details matter when selling investments.
If you don’t pay attention to the details, the tax consequences of a sale may be different from what you expect. For example, if you bought the same security at different times and prices and want to sell high-tax-basis shares to reduce gain or increase a loss to offset other gains, be sure to specifically identify which block of shares is being sold.
And when it gets close to year end, keep in mind that the trade date, not the settlement date, of publicly traded securities determines the year in which you recognize the gain or loss.
Finally, consider the transaction costs, such as broker fees. While of course such costs aren’t taxes, like taxes they can have a significant impact on your net returns, especially over time, because they also reduce the amount of money you have available to invest.
The tax experts at Ciuni & Panichi can answer your questions about the potential tax impact of an investment sale you’re considering — or all of the details you should keep in mind to minimize it — contact Jim Komos, 216.831.7171 or jkomos@cp-advisors.com.
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