Mark Kohler walks through four tax deductions most business owners miss: technology and supplies, cell phone and internet, travel, and meals and entertainment. He covers the rules for each, including limits on entertainment under the Tax Cuts and Jobs Act, and stresses keeping good records.
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Well, hopefully the title of this video intrigued you. If you're a business owner, if you own rental real estate, sell online, you're a multi level marketing, affiliate marketing. I've got some business deductions that I don't want you to miss out on. Those that are the most underutilized, most forgotten, I got them here and I want to break them down and try to save you some money. Now, before I break down four areas, if I think the most underutilized or most forgotten, I want to make an important point. Guys, you can be your own worst enemy. You've got to have these write offs at the top of your mind. It's not about just making money, it's saving money. It's the yin and the yang. I want you to find ways to make these things a write off. When you're out and about as a business owner, your accountant, your lawyer, your banker, your insurance agent, they can't pull these write offs out of a hat. You got to help them. So I want you to keep these deductions, these write offs at the top of your mind and have a good reporting system or accounting software system or some method so that we don't miss them. Number one, technology and supplies. Now, I know that sounds a little broad, so let me give you a few ideas of what I'm talking about. Everything you buy at Best Buy, Apple Store, Staples, anything that you buy for your home office, you're traveling around and you're buying cameras, you're buying drones, you're buying an Apple watch, you're buying PDAs, laptops, computers, all of those types of technology, technology, devices are going to help you in your business, right? That's the mentality I want you to think about. Ooh, can I use this set of pens or pencils or paper or printer or fax? Do fax machines really exist anymore? Did I really say that? Anyway, the point is, when you're out shopping, think, how can I use this in my business? Write it down. Now, at the end of the year, your accountant might say, well, this is a big enough ticket item going to go 80% business, 20 personal. I'm not saying you can write off 100% of that drone, but if you're taking pictures of your business, some aerial photos of your real estate or something where that drone comes in handy, then I want to write off part of it. So think outside the box on anything technology or supplies for your business to operate more smoothly and make money. Number two, cell phone and Internet. Now, some of you may say, well, Mark, that's technology. I say otherwise. I talking about your monthly service, not just the acquiring of the device. Your phone is 100% write off as long as you can show a dedicated home line or another cell phone for your personal line. Then if you have a business, that cell phone's 100%, maybe even your spouse's, your kids, your parents, anybody on your board of advisors or board of directors. I want you to think big picture here. All of those services for Internet and cell phone you need for your business, make sure you talk to your accountant and you're aggressive and making sure they're a write off. Number three, travel. One of my favorite. I want to make sure every trip I take is a tax write off. It drives my family crazy because I've got to think how are we going to have a business meeting, meet with a vendor, meet with a customer, go to a workshop, go check on a rental property, make an offer on a property. All of those are great reasons that your travel could be a write off. Because you're going to take a trip and meet someone, sell something, check on property, buy property. Lots of options there. Your day of travels, a write off. Your day backs a write off. And every day you do business is a write off. And if you book into weekend with business on a Friday and a Monday, the weekend becomes a write off. Lots of technical rules here. I've got a chapter on this in my book. I love it. I write about it. There's other videos of mine on YouTube. When it comes to travel, check it out. Maximize your travel. Every trip, the airfare, the hotel, the Uber, the valet, the subway, the ferry, the, all the stuff is 100% write off. This is not your auto, this is not your meals, it's your travel. Finally, meals and entertainment. Now this is why I said 100% back on the travel item. Because those expenses, if business are 100% deductible, meals are generally going to be 50% because the IRS knows you got to eat anyway. So when you're talking with someone over a meal for business, even if you pay for your own meal and they pay for theirs, that's a 50% write off. If you buy someone the meal, that's fine, 50% of the bill. And we're talking the food, the tip, the alcohol, the bar tab, everything is included. Now if you go on the cheap and you want to take a per diem, which is the kind of the average rate in that city for a breakfast, lunch or dinner, you can go to the GSA website to Find out what those per diems are. I have some clients that just rely on that and then eat cheap. You can take the per diem or your actual whichever's higher. So anyway, the point is, when you're doing business and having a business conversation or even traveling for business by yourself, that meal is a 50% deduction. Now, one little new rule that you got to be aware of. When I say entertainment, I bring it up because we grew up, all of us, for the last 50 years, knowing that entertainment was a write off. You even if it was limited by 50% right now it is not. Under the new Tax Cuts and jobs act passed January 1, 2018. We've got about four or five years here until 2023 and then it's going to come back, we hope. But there is no deduction for entertainment. And finally, if you own a brick and mortar business with lots of employees, some meals and entertainment for team building with your employees can still be 100% write off. But. But you've got to look at the rules carefully and talk with your accountant. Bottom line, meals, travel, technology, cell phones, Internet, all those things can get understated on a tax return. Make sure you're tracking them, talking to your accountant, and maximizing those write offs. Keep living the dream. Thanks so much for watching that video and I want to be your source for tax and legal strategies. It's hard enough to live the American dream without being out on the web on Google, trying to find answers to complex questions and just clicking a mouse, hoping you got it right. My team and I want to be a huge resource to you, the law firm, accounting firm, my education resources on my site. Please continue to follow these strategies. I know they'll save you thousands. 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