Most food and entertainment is a 50% deductible expense on your taxes, but there are a few exceptions to that rule, and what better way of learning about them than with our Goofus and Gallant analogue CEO and CFO?
CEO makes sure that he caters his exclusive executive staff meetings with the finest French Pastries, most of which he eats himself, since so many of the executives are on no-carb diets. This is a 50% deductible expense.
CFO arranges the company barbeque every year, which all of the employees are invited to, and their families. The hotdogs, burgers and sodas are on the company, and because it’s for all employees, this is a 100% deductible expense.
CEO is typically late to his first meeting every morning because he stops at his preferred coffee shop half way across town and forgets to budget it into his time. Coincidentally it serves those pastries he likes too. He charges it to the corporate credit card because he’s the CEO, right? And this is a 50% deductible expense, . . . if it’s a business purpose, of course.
CFO buys donuts for morning meetings, and makes sure that any 9-5 employees working past 8pm gets a meal on the company. These are “de minimis” employee benefits, they’re for the employees but aren’t considered taxable income to them. Shockingly, this kind of thing is 100% deductible.
CEO often has to wine and dine clients and potential clients, and his assistant generally has to call the restaurant a few days later to get the receipts because he’s so bad at remembering to save them. This is the quintessential 50% deductible expense.
CFO knows that some staff have to be in the office 24 hours a day to respond to emergency calls, and the company provides meals delivered to the office for them. These kinds of meals are deductible 100% and the secretaries are great about getting the receipts to his office because they get leftover donuts when they drop them off.
You definitely need to keep good records if you claim these deductions though, because the IRS keeps a special eye peeled for companies that claim them. You need the names of the employees, the date, and the business purpose along with the receipts. If you need recommendations about setting these kinds of things up, we would be happy to help you out. Your employees would also appreciate it, especially if it means donuts for them.
Be more like your favorite CFO to make your work experience as good as possible.
Tags: ceo and cfo, weirdly funny