My friend just finished her first year of running her own business, and she is wondering if her "meals and entertainment" expenses are too high. Is there a certain percentage that is considered normal?
2006-12-29 09:05:35 · 4 answers · asked by TigerLilly 4 in Business & Finance ➔ Taxes ➔ United States
As long as it's legitimate business expense ie: she sales clothing and she takes a potential buyer out to lunch to sell them on her line of clothing, then she can take the expense. If it gets very high then IRS might red flag it and ask her to produce receipts and names and details
A new business can take a loss for 3 years and the IRS won't question it
2006-12-29 09:43:59 · answer #1 · answered by Red Velvet 2 · 4⤊ 0⤋
I have never heard of a standard. It wouldn't make sense to have one, some business are just more prone to meals and entertainment then others.
What your friend should worry about is if her meals and entertainment are legitimate business expenses if they are even in the IRS looks into them she will be fine, if they aren't it doesn't matter what the standard amount is.
2006-12-29 17:11:59 · answer #2 · answered by Jerry 3 · 2⤊ 0⤋
The IRS has amounts that above which various flags are raised.
However, they do not make those numbers public.
2006-12-29 17:40:27 · answer #3 · answered by Wayne Z 7 · 1⤊ 2⤋
No, because when you own property,stores,shops..exc.. your bills will become higher.
2006-12-29 17:13:42 · answer #4 · answered by Anonymous · 0⤊ 2⤋