Estimated tax tip savings. Let’s say you spend $2,000 in 100 percent tax-deductible lunches. In the 28 percent bracket, this deduction gives you tax savings of $560 ($2,000 x 28 percent).
When you take your employees out to lunch, the IRS normally allows you to deduct only 50 percent of the lunch expense. However, there’s a wrinkle in the tax code that allows you to provide meals for your employees and write off 100 percent of the expenses, thus doubling your potential deduction.
What’s the secret? Don’t go out for lunch. Bring the lunch to you.
That’s right—you can as much as double your deduction simply by eating the meal on your business premises and following a couple of basic rules.
As a business owner, you or your corporation may have to classify your own meal differently, but don’t worry—we’ll tell you how you can join your employees, eat your meal, and also maximize your overall tax deductions.
Follow This Formula
You get the 100 percent deduction for employee meals when ... Log in to view full article.