The Dining Write-off: Save Thousands of Dollars in Taxes for 2021 and 2022!

Foreign.

Welcome, everyone, to the Main Street Business Podcast with Mark Kohler and Matt Sorenson. Excited to be with you today. It's Inauguration day as we're recording this.

Yeah.

We have President Biden in the White House officially now.

In the White House. Like, I know he's out.

I mean, you know what I mean?

Like, did Trump move out?

I think he's hiding somewhere. I think Trump's hiding in the map room. Yeah.

Biden comes around the corner, he's like, what are you doing in here?

He's gonna scare him and Biden's gonna fall over and die. Geez. Well, sorry for the political jokes. So, you know one way we're gonna piss off somebody by making those political jokes. But thanks for being with us. This is not a political podcast. This is a podcast about living the American dream. And we're gonna be talking about that today as we do every week here on the Main Street Business Podcast.

You know, and on that note, because it is inauguration day and the all of you are probably bored stiff watching the news, we're keeping the podcast today tight. It's gonna be a little shorter because it's 1k killer topic. And that is the dining write off in 2021. It's going to be amazing. And this is probably.

Sounds delicious.

Yeah, it sounds delicious. I'll have that. It's the soup du jour. Are you Dumb and Dumber fans? Yes, we are quoting Dumb and Dumber on this podcast. Our ratings just went down. So anyway, the dining runoff is the best it's ever been. For the next two years, Congress thought let's stimulate the industry, the restaurant industry, and that whole food economy that's been decimated by Covid and the stay at home orders. Although DoorDash and Grubhub is singing its praises. But we are going to hopefully dine out again. We're going to dine in again. We're going to do all these things to help the restaurant community. And if it's a business meal, it is 100% write off. So we're going to dive into that, break it down, tell you what the options are and how cool it is and how all of you, even as a rental property owner, which is a side business, we want all of you to take advantage of that new dining write off. So we're going to come to that in a minute. But good stuff. Awesome.

Okay, well, I was going to give, before we dive in, I was going to give a little tax slash legal tip. You know, that's like the actor slash waiter. You know, can, you know. So I'm gonna go the tax slash legal tip for today.

Okayer twofer.

Yeah, it's the twofer because this is about our new president, President Biden's tax plan, which is going to require an act of Congress, which is a law. All right. See how I got there? See right there. Okay. Now this, this is going to, we're going to talk about this in upcoming podcast and we're going to see what Biden and Democrat Congress does. But I want to hit a few points just so you know what's on the horizon from a tax standpoint. First, Biden wants to increase the individual rate from 37 to 39%. He wants to get rid of the 1031 exchange on real estate where you can sell a property and roll the gain into the next property without paying tax. He wants to phase out the qualified business, small business, 20% deduction for higher income small businesses. He wants to phase it out so it only helps lower income businesses. He wants to reduce the estate tax exemption down from the 10 million per individual. 20 million a couple, approximately. Back down to the 5 million an individual, 10 million a couple. So he's going to cut the estate tax exemption in half so more people will pay estate tax. He wants to raise corporate tax from 21 to 28%. All right.

Now anything else that you want to, you know, while I'm down, I mean,

so I'm just saying, you know, there's a lot of reasons, many of you are happy for a Biden presidency and there's some things, there's some, you know, on the lower income and that's what Biden said. He wants to help people, particularly those under, making under 400,000. He's saying you're not, they're not going to raise taxes. But the reality is small business owners, you are going to pay more in taxes, at least 99% of you under these provisions. So we're going to try and outline those throughout the year, see what ones get hot, which ones get traction. There's more. I'm just hitting the high notes of what to be on the lookout for. And we'll be doing some podcasts, digging a little more deeper into those for this year so we can be prepared and be planning and be a little more strategic about our business and tax planning.

Okay, now I'm going to take the Biden side of this argument. So hopefully some of you did not turn off your podcast and you're pissed or mad right now. Let me say something to Matt. I'll Take the other side of the coin, I got when I said just what Matt said in the fall when I was analyzing Joe Biden's tax plan at that time, I got a lot of hate mail that said, hey, not 99% of the small business owners are going to pay more in taxes. Only the ones making generally before over 400 grand or maybe 2 or 300 grand, but those are making less than 400 grand is not low income. And really he does want, he says he wants to be very pro business, pro Main Street. He doesn't want to take away tax write offs that help the average small business owner. And it's really only those that are making 300 grand or more. Let's just be a little more conservative in that statement. But I think we can because single individuals could be in that 2 to 300 grand level, married filing, joint, 400 grand or more. But that's the truth in some ways too. And we don't know. And I'm not saying the truth in some ways, the truth in other ways. I'm just saying we're going to see how this is going to play out. But it is. But I do want to say, and I hope that the Democrats come through for the small business owner in America and if you make a lot of money as a small business owner, you probably will pay more. Yeah. But yeah, good things.

Yeah, there's other proposals. Yeah, there's tax credits, increasing the child tax credit, increasing the child care tax credit. I mean he's got forgiveness, student loan debt, you know, things that he wants to forgive that wouldn't be taxable. I mean there's, there's a lot of other tax credits, tax credits that he's proposing that will frankly use some of these, this tax revenue that will be generated here. So there are obviously benefits to this. But I think a lot of the tax changes we saw from tax cuts and jobs, acts that small business really clamored for, let's be honest, are a lot of things that are going to get pulled back. So if you were a big fan of the QBI and things like that, corporate tax rates going down, individual rates going down a couple percent, looks like those are going to get affected. And we don't know where, who it's going to hit. Biden's put the marker at 400 grand, but we'll be updating you on that. And I'm not being political about it. You know, I'm, I'm pretty apolitical if you don't know me. I'm, yeah, I Kind of hate everybody in politics so much. Stick to the tax provision. Okay. Do you have a tip, Mark?

Yeah, normally I alienate all of our listeners. So that was Matt's turn.

Yeah, I just said I hate every politician. So if you voted for Biden or Trump.

Anyways. Okay, I'm gonna try to do two quick tax tips because both are so important to me. And at this time of year, I love New Year's resolutions. I'm kind of a goal setting type of guy. I love it. I'm recording a webinar tonight for those that listen once a month to my evening tax and legal webinars. And they're live. And if any of you want to participate in those, you can go to the any of our websites. But in particular, the easiest would be markjkohler.com and check out the webinar tonight. And if you missed it, it's all recorded. The last 12 webinars are recorded and it's like 20 bucks a month to get access immediately to all of them and participate each month. And we're going to be talking about 21 strategic. 2021 strategic planning. One of those New Year's resolutions for me every year is to try to be better about keeping receipts. Some of you may be like, come on, Mark, you're a tax lawyer, you're an accountant, you should be really, really good at that. No. And frankly, we all suck at it. We're not great at it. And it's tough to keep track of all those little things. And I wanted to make a few general statements and then give a tip as quickly as I can. First, receipts. Keeping receipts is important. Keeping receipts is not bookkeeping. We're not keeping receipts for bookkeeping. That's QuickBooks. Some apps, some Apple software, tracking your bank statements, your credit cards. That's not. That's bookkeeping. Keeping receipts does not play into bookkeeping. Keeping receipts is audit protection. Next fact. Audits come two to three years after the fact. You're not going to get audited today. For 2020 taxes. If you get audited today, most of those are 2019, 2018 or older. So receipts are what you pull out to help prove your write offs. Do you have to keep the paper? No, a scanned receipt is as valid as the paper receipt. So what's my tip? Find an app that you love. And I was just scrolling here. While Matt was talking through some of the apps, I met with a good friend last night. Clay told him I'd give him a shout out. And he loves the app receipts. Now, the Hard part was, is I didn't have him show me what it looks like last night because there are so many apps that start with receipts. There are smart receipts, fetch, geniuscan receipts, colon create, print. You know, there's all these different receipts, so I got to find out which one he loved. He said he paid $10 once and there's no monthly fee. He could take pictures of all of his receipts and once a month, log in, categorize them, and they just go straight into Dropbox, and then that Dropbox is backed up in the cloud. And if you get audited three years from now, you can just print those receipts out and go into your audit scenario. I don't want you to organize the receipts. If you really, really want to categorize them, that's fine. Me, I just take a picture of them, they go into a folder. There's my 2021 receipts. I don't want to deal with it unless the IRS comes knocking. So my first tax recommendation, tax tip for all of you is recommit yourself, Find a good little app without a monthly fee, get a little app, test it out, and make sure it's going into some sort of Evernote, Dropbox, Google sheet, Google, I don't know, some sort of folder in the cloud that you can access your receipts year by year in the future. Matt, any thoughts on that? No.

No.

Next quick tip. I shared this in a webinar earlier today and I just thought it was really poignant. So I'm going to share it right now. On our podcast, I had a guy, Jay Hildebrandt, he's a news anchor in this region of Idaho and Utah. Great guy. And he came over my studio and right here, what you see, the backdrop and all this, we always are struggling with lighting, making sure there's not reflections and all these little things. And I said, hey, can you come by and just tell us what you see in studios whenever you know, over your career and give us some lighting advice? I said, I'll pay you whatever your hourly rate is, please. And he's like, no problem. Came over, yada, yada, gave me a little invoice and I text him and I said, hey, I just want to venue Venmo you. It'd be easier for me. What's your Venmo? And he gave me his Venmo id. Well, I went to Venmo yesterday to pay him for a business consultant. He came by the studio, which is producing video for social media and marketing. Everything you see in here is a write off. Any of you that do social media or your website. Cameras, drones, video cameras, still cameras, Anything you use in your studio is going to be a write off to build your business. Right? So I pulled out my Venmo and lo and behold, the only bank account tied to my Venmo at the moment is my personal account. And I was in a hurry and I was like, I'll just pay him out of my personal account. And I said, whoa, whoa, whoa, I'm gonna pay this guy a few hundred bucks. And I was like, stop, Mark, take five minutes, link your S Corp bank account to Venmo. And so I went on, I said link account. And it just a bank account direct, no fee, go to Wells Fargo. Logged in, chose my S Corp. Initially I was going to choose Matt's S Corp just so I could, he could pay my bill for me. But I didn't.

Wouldn't be the first time. Wouldn't be.

That's an inside joke by the way, because being a signer on Matt's accounts and he on my accounts is wonderful because, you know, sometimes I just happen to charge his account on accident, on accident, by the way.

Okay.

Anyway, so I chose my S Corp account, linked it to Venmo, paid him. Now it took me 10 minutes, but here's the point. It was a 3,400 dollar bill, but if I'm in a 30% easy tax bracket on my next dollar with Fed and state combined, 25 fed, five state, not incomprehensible, comprehensible. I mean many of you are facing 40 to 50% marginal rates on your next dollar, as I am sometimes too. But just at 30% on a $300 bill, I literally saved $100 in taxes. $100. That if I would have paid for it on my personal account, I would have never seen it. It would have got lost in there. I would have forgot about it when I'm later this year. It would have never gotten there. And that's what happens all the time. People go to Costco, they use PayPal, they use Amazon, they use Venmo, they use Apple Pay and they're paying with their personal account and they don't get the write off. So people, my tip is take the time to track your receipts, take the time to link your business account to all of your payment methods. So whenever you're paying for something, business wise, you get the write off. There you go. Love it. I thought that was a lot more practical than your Biden comment. I just want to say. And I didn't. Yeah,

yeah, I think I Don't think I did myself any favors with that tip. But, you know, I just.

Whatever.

It's in the news and I'm seeing. I was reading all this stuff on the tax proposal. I just figured I'd share all that great news. But I love that tip on the. On the Using the right accounts because. Particularly for the solopreneur, or you got a side hustle, like, it's not like you have an accounting department or a CPA or a bookkeeper doing your stuff. A lot of times it's you and the. Make it easy on yourself. Have a little discipline in the accounts you're doing. Pay for personal expense with a personal card. Pay for business expenses with a business card or business account. It just. It makes your life so much easier if you have the discipline to do that. Like Mark said, with linking the accounts, you just. That's. I mean, that's not even half the battle. That's like 95% of the battle. Yeah.

Yeah. So it's so important. Okay, so the topic du jour, Matt, that means topic of the day. I just want.

Okay, okay.

I was speaking the language of love.

Okay.

Oui.

Okay. Yeah.

Let's dim the lights in here a little. Okay, so for the topic du jour. Oh, look at that. You know, little pun, you know, soup du jour, dining, expense. Topic du jour. Look at that. See, I just didn't even know when I was pulling it together, you know,

that's why you said it. You just walked into that. You didn't even.

I just walked into that. You know, that's. That's how natural this is for me. You know, I'm just naturally an entertainer of tax law. You know, if there's an entertainer of tax law, I want to be that guy. So. Yeah, that was a stretch. Okay, now, further strategies. Okay, I've got four ways I like to write off dining and consider this topic.

This is breakfast, lunch, dinner, maybe late night snack.

Breakfast, lunch, dinner, midnight snack, or forecast. So if, Matt, you would allow me. We didn't even plan this, but if you allow me, I'll create the framework for this, and then I'm going to just throw it at you because I know we both are on the same page on so much of this, but maybe I throw out a couple. A framework for this. Okay.

Yeah, you can take me out first.

I want to say that. Take me out first. Keep in mind, people, travel is not dining. When you travel for business, that's hotel, airfare, blah, blah, blah. Maybe airplanes. Da, da, da. When you pay for food, when you're traveling still on the food line, it's still on the dining line. It doesn't morph into 100% travel deduction. And for years and years we'd find clients trying to bury their room service in the travel bill. And that's, that's, you get audited for that. Not good. Okay, so remember, travel is not dining. Auto is not dining. Entertainment is not dining. Some of you probably know now what's called topgolf, where you go with the some friends and you eat food and play golf. And it's kind of a corporate little thing and it's like bowling for rich people. And so you go play topgolf. The food bill is always paid for separately than the golf bill. There's a reason for that because the golf is entertainment, the food is a write off. So entertainment is one thing and right now is currently not a write off. But dining is separate from that. So you want to keep. That's my first framework for today. Now the first type of dining that we're almost familiar with, and I'll let Matt describe this and maybe an example or two is dining with someone else. What's the old rule, what's the new rule and how would you define that, Matt? Give me a few examples. Dining with someone else.

Yeah, well, you know, maybe your business partner takes you out and you guys talk business, of course.

Right.

There's got to be a business conversation or a business reason for the, for the meal. And you know the, the deduction used to be limited, right. If, if we had a hundred dollar meal, we got a $50 deduction, right? You got, you got that cut in half. And so the new rule of course is 100%. We have a hundred dollar dinner, hundred dollar deduction.

Does that include the tip?

That should include the tip, absolutely.

Yeah. Now what's interesting, what about valet travel?

See, that's travel which 100% deductible already. Good one. Okay.

Yeah. So very interesting. Right. The one I've been debating, Matt too is you pay for Uber eats or doordash. In the good old days when dining was 50%, I was starting to advocate. I'm going to take my, all my Uber eats for these people in Covid year 2020 and all those delivery expenses, those are 100%. You could even driven there and picked up the food or driven back or paid for delivery. So that delivery fee was not part of the dining. But anyway, the point is now it's 100%. I love it. What happens if I go Dutch, Matt? We go out to lunch and you're not willing to buy my lunch. Can I still write it off even though?

Absolutely, absolutely, yeah. I mean, you're on business, so. And. Absolutely. That's a business purpose. Fear there. You talk business, you're certainly expensive on your side, and I might do the same on mine. Maybe, you know, I was a business reason for me to be there, and I'm gonna expense it, too. Now, I have a question. We say meals. What if it's just drinks?

Oh, I was gonna say, what about the cocktails before the meal?

Yeah. Or what if it was just only cocktails? What if it was just there was no meals involved?

Now this is where we start to open a worms. Okay. And we're going to go there right now first. In the good old days. Absolutely. The bar tab is included with the dinner. And so if we go out for drinks or we go out for sodas, or we go out for Slurpees, or we go to Del Taco or we go to Mastro's or we go to Ruth Chris, whatever it is, the dining is cut in half, 50%. As long as I'm talking business with someone, vendor, customer, partner, employee, even a spouse or family member, that's a part of my business. We're talking business. Keep good receipts, keep a note of what you talked about. That would be the typical anal thing to do. But not everybody does it. Just don't overdo it. Okay? Now the question is, if we get 100% dining write off. In the legislation passed the. In the 11th hour of December, signed by Donald Trump, the theory was we are going to benefit restaurants. So dining out, dining in takeout, anything from a restaurant is 100% write off. Well, what happens if I go to the grocery store and I pick up a loaf of bread, some peanut butter and jelly, and I come over to Matt's and we make sandwiches and talk business, Is that dining? I'm going to say no. I think we haven't got guidance on this, but I think that it's going to come down to prepared food. So if we go to the grocery store and I go over to the deli and we get sandwiches made or pick up some fried chicken and maybe some deli salads, that's prepared food. That's equivalent to going to a restaurant and there's buffets all over the place in the good old days. But that's. I think, Matt, that's the line. Would you agree? What's your take on this restaurant definition?

That seems. That seems right to me. And I think in some ways I know they're trying to benefit the small business. That's the restaurant, you know, that you go dine in, not the grocery store that's like sold more toilet paper and prepared food than they ever had for takeout. They're having record profits. But you might get the prepared food from the deli at the grocery store. That's going to be a meal probably. I mean, they just. So it's just, it's just easier to implement the rule. And I think that would probably be how the meals were deducted anyways before they made the deduction. 100% from 50.

Yeah. And this is the tricky part because if we, when Matt brought up drinks, the first thing I thought is, okay, we go out to the nice restaurant and have cocktails, we go to the bar and there's drinks and we're talking business. No problem. It's prepared for us. There might be appetizers, there might be food. We already know that's going to be a write off. Before it was 50%. Now it's 100%. Boom. Tips and everything. Love it. Huge. But what happens if we go by the grocery store, pick up some margarita, mix a fifth of this, that or another, and come back and I don't know what goes in a margarita. Is it tequila or rum? I'm embarrassed. Is it neither?

Gin typically.

Gin, typically. Okay.

Yeah, you could have a vodka martini, but yeah.

Oh, martini. I said margarita, but.

Oh, you said margarita. Oh, tequila. Sorry.

Okay. I thought it was tequila. That would have been my guess on a multiple choice. Sorry. It's been a while since the high school days of, you know, running bootlegging. But anyway, so here's, but here's the point. We didn't. We went to the grocery store and then we came home and made drinks and I don't think that's going to qualify. I think again, it has to be prepared for you. Now if you go to the bakery and you get donuts, but they also do sandwiches there and you bring them back to the office, is that 100%? I'm going to say if it's prepared for you, yes. And we're in this now. Second option, so we go out to eat, we talk business. Now I pick up food and bring it back to the office. So it's takeout. But I'm not having the business meeting at the restaurant. I'm doing it in the office.

Matt, your take, 100% deduction.

Totally agree. Love it.

I mean, yeah, I'm going 100 on that.

One.

One dollar, Bob. One dollar. My price is right. Okay. I don't know why that's, like, from the. I don't know why that gets me. I just think that's the funniest thing, is the price is right where you can bid $1. Totally getting off topic.

I'd like. It's just strategic. If everybody's high, it is. It's the one closest to it without going over.

If you're the dumb guy that's been on there forever, you get a bid last, you know, and you. And the rules on prices.

Right.

Is you can't. If you overbid, you know, then you automatically lose. It's not closest. If you overbid, you're out. So there's always people bidding $, and then there's the guy next to him that goes, $2.

Yeah. If you ever do to do the dollar thing, you got to be the last guy. Okay, well, 100%. Going 100%. Yep, 100%. Now, what's interesting is before the Tax Cuts and jobs act passed January 1st of 2018. So for 2018, 19, and 20, for the last three years, we've been dealing with food in the office at 50%. The rule before that was 100% if you ate in the office and brought the employees together for a staff meeting. So we're now back to 100% for that, which is powerful. The third category I like to talk about is dining while traveling. So let's say Matt's in our office in Phoenix, and I go, hey, Matt, I'm gonna come down, we're gonna talk business, maybe do a little golfing. And I'm gonna use two examples here, but I roll into Sky Harbor Airport, which is the Phoenix airport. I pick up an Uber, head to the hotel. Or maybe I'm gonna stay at Matt's house. If he's so generous, you know, let's me stay at his place. But let's say Matt's in some meetings, and I got some time to kill. I'm hungry. I've been traveling. And I go, I'm going to go hit Wendy's. Carl's Jr. Go get a burger and wait for Matt to get out of his meetings. Can I write that off, Matt?

Absolutely. 100%. 100%.

Because I'm traveling for business. Traveling for business. Now you give me example, Matt. So we go out for golf.

Okay.

What's the variables that could occur?

Well, okay, let's say. Let's say we're out on the course, and we get a Snickers bar, and A drink from, you know, the cart attendant or whatever you call them, you know. Yeah, 100%.

100%. Boom. But the golf, I don't get it

right off the round of golf, though.

That's right.

But the food bill, that's the one

where I hope Biden does us a solid. You know, I'm going to jump on the Biden bandwagon when he's like, you know what? We need to bring back the entertainment deduction, which has been brutal for the entertainment industry. I mean, the skyboxes at all the games, the theater tickets, the golf. I mean, how many golf has been really, really impacted with the fact that it's not a business write off and how many business deals are done on the golf course?

Course.

And you go out to the theater and you go to the show or you go to the baseball game or the basketball. You know, there's a corporate business experience when you entertain. I'm hoping we get that back.

So. Yeah, yeah, yeah, we'll see. I think that's low on the list. And the Biden tax proposal.

I'm going to text him right now. Come on. Yeah, give me a. Yeah, give me a solid.

Yeah.

Okay, so you've got dining with someone, dining in the office, Dining while traveling. By myself. Because, see, I can write it off while I'm by myself. I have one more category if I could, Matt, and then we can button this up. We plan on a shorter podcast today. We don't want to beat this to death. The fourth category for me is kind of event food, which is still 100% it was before, but I think it's worth addressing. Things like this are. I'll give some examples, Matt. Maybe I'll give three. Two or three. And then, Matt, you can maybe drum up one or two. Yeah, is the first one is you're a realtor and you're doing an open house. You buy some crackers, some cheese, some wine and you're doing a little open house. 100% write off. Because that's not dining, it's an event. You're holding an event. You're holding an open house. Next, let's say you're doing a multi level type business where you're selling Monavie or Amway or any sort of lotion or potion or whatever, and you're doing it and you're at home and you're. Every Thursday night you have a little dinner meeting and you pick up food at Costco and you give everybody little mini sandwiches and little appetizers. 100% you're holding an event, you're doing a presentation, I would say that's 100% write off. And it's not dining. I would put that on the event line for food.

Event and event is. Is you're. You're always getting that because this, this meals or food or beverage. Let's say I'm going to. Is for 2021 and 2022. That's the 100% write off. But what you're talking about event is always 100%.

Mm. Right. We don't confuse it. Yeah. Yeah.

So like last year, for those of you doing your 2019 book or, sorry, 2020 books and taxes, is, you know, you're 100% deducting anything you can call an event as Mark's staying there. The other categories you've talked about, like, you know, going out to dinner with a customer or a vendor or potential client or a business partner, whatever, those are 50% in 2020. So make sure you're classifying these right in your books and your accountant knows too, so that you're picking up on this event and know the difference because it's going to change where, like I said, 2020 and for 2023, it's going to get treated different.

Now, I have one maybe summary cautionary point. Do you any other types of food or examples Matt, you'd give that people should be aware of?

Yeah. What I had question on is what about the, the snacks you might have in the office? Like the food and drinks you have in the office that are always there? Is that not part of this?

I don't think it's gonna be. That's where I would say I. It's not prepared. Now if you go buy bagels or donuts.

Yeah.

And have it brought in, or you pick it up at the restaurant prepared for you in a bakery, I think it's going to meet that definition. I think you get the hundred percent. But I think for those that are going to pick up a bunch of food at Costco and then bring it back and stuff it in the shelves of the office, we're not going to probably take 100% on that. Now, why this matters, people, is you're the captain of your ship. You can't expect your accountant to, to have a crystal ball when they're looking at your bank statements and just know where all this crap is to go. A lot of times you're going to have to code it. I like clients to have two or three highlighters and they go ching, ching, ching. And their highlighters mean different Things, travel, dining, home, office supplies, blah, blah, blah. You want to help your bookkeeper by helping with these categories. Now, the reason why this matters to me is if you're putting event food, the event expense line, the IRS isn't going to look at that as dining. They're going to look at it as an event. So why put event food in the dining line, which might get scrutinized? You want to make the job easy for the auditor. If it comes to that. You want to say, here's my food for the office, 50%. Own up to it. Get it out there. Let it be a red herring, Draw some attention. It's 50% because it wasn't prepared. Here's my dining line, and then here's my event line. And the event line may not even come into the discussion. And it also makes your tax return look more well balanced. You want to piece this money in different spots so your tax return looks like a work of art. You just want to throw it all in the dining line. Come on, it's 100% now. Blah. That's reckless. It's not smart. From an audit protection standpoint, Point, be strategic.

Okay, well, let's come back here and summarize this so we know, like, where I can get the food from. Because now the. The bill says, and we've been trying to define, like, is the bakery a restaurant, is the grocery a restaurant or something? Because the bill for the 100% deduction is food or beverages provided by a restaurant. What the heck's a restaurant? Yeah, they get up. They get a license to sell food. You know, you talked about prepared food. Yeah, I mean, I'm at Costco getting pizza. I mean, at the line with a, you know, a churro. Yeah, a restaurant. I mean, it's Costco. Yeah, pizza. And the freezer line. That's not.

See, and I think. And this is where all of you being a little more careful with the debit cards or credit cards you use and helping with categories matters, categorizing matters, because I'll tell you right now, if I was arguing for myself or one of my clients, you're darn right, I would say a deli at the counter is a restaurant. It's prepared food. Now, you can't. Now, where you're going to get in trouble is you go to the grocery store and you spend 100 bucks. You go pick up a gallon of milk, you get this, that, another, some detergent. Then you swing by the deli and you go, oh, I got lunch. And you try to write off the whole thing. You're not being ethical, you're not being honest. And if you get, I get a

birthday cake for someone's birthday in the office or something.

Yeah, you're, you're going to, you're screwing yourself over there because you're being a tax dodger. You're evading taxes now to avoid tax. What you would do. And I've done this before at Costco. Did you have kind of the cart where you separate it, you go, here's the personal and here's the business. And so when you go through the grocery store, you may say, okay, this is all the grocery items. Some of it might even be food for the office. That's 50%. It's non prepared food. It's, it's the coffee, the sugar, the creamer, all the little things you're going to put around in the lunchroom. But then you pick up a sandwich at the deli, you say, oh, okay, this, that's on a separate transaction and you run it both ways. So I think we have to be a little conscientious that, because I think the bakery, the deli, the prepared food at the grocery store would qualify, but you're not. But you got to make it easy for the IRS where they can't fight you on it. You're like, you want, you want to go to tax court over that? They're going to. Now you got it. You know, I deal with IRS agents. They don't want to fight over something that could go either way. So make it easy. Tee it up for them.

Yeah, all right. Well, that's something to chew on for sure.

I bet all of you are satisfied and full from the podcast. No, the one thing I did want to say in closing is dining is oftentimes an underutilized write off. I look at a lot of clients tax returns and go, $322 in dining for the entire year. Are you kidding me? Yeah. We go out and who's your board of directors? Who's your board of advisors? Is the family on the payroll? Did you do this? And all of a sudden they're like, oh my gosh, dining could be 2 or 3,000. Absolutely. Don't be afraid to take it. Now, I don't want you to try to write off 12 grand in dining when you only had 30,000 in income. That's not going to look good. But if you had 300,000 in income and 12,000 in dining, that might be fine. So you have to look at your tax return as a big picture and where does the dining line fall in perspective to other expenses or my total revenue? And then go for it. Be, be aggressive. There's nothing wrong with that. If it's a valid write off, don't be afraid to take it. And I think those are really important points.

Yeah, awesome. Well, appreciate everybody hanging in there on this topic. I think it's, it is one that I think every business owner needs to take a deduction for. Even as Mark said on the front end, even you real estate investors with rental properties, this is still an expense that you can take. Just be reasonable with you know how much you're taking it for the amount of income and the number of properties you have. And of course, if you like the show, please like it. Give us five stars. Subscribe. I don't know all the different things you can do. Do those things that, you know, give positive vibes out for the Main Street Business podcast.

Thanks everybody. I love it. We'll see you next week everybody. And as soon as we start seeing some developments in Congress on any sort of tax legislation which we know is coming, we will keep you posted. Make sure to sign up for the newsletter@mainstreetbusiness.com and check out that other podcast, the Directed Ira Podcast. So freaking awesome. See everybody next week.