TAX TIP OF THE DAY... #1 most overlooked deduction for rentals and small business?
#1 answer... Meals & entertainment.
For rentals the deduction is rarely taken. For small business the deduction is under utilized. The deduction is specifically recognized and allowed by the Internal Revenue Code. But taxpayers are often afraid to use this gem of a deduction.
You must discuss business before, during or after the meal or entertainment event. You must keep the receipt and write on it 1) who was there and 2) what you discussed.
In my judgement, a red flag deducting the GREATER of $300 or approximately 4-5% of gross income. But I rarely see taxpayers deducting this much. Don't be a chicken. Follow the rules, and you will have no trouble. Eat, drink and be merry!
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