Filing taxes is stressful enough as it is. But for restaurant owners, tax time can quickly have you feeling in the weeds.
“Between accounting for all of your potential deductions and reporting them all accurately, it’s important to have a professional who can help make sure you don’t miss anything. Here’s seven tips to help you get everything mise en place come tax time.”
- Deduct everything on your menu
Hopefully you’re already writing off all of your food and beverage costs, but did you know you can also write off ingredients like condiments and spices? Make sure you’re also accounting for food that is wasted or spoiled. Track food and beverage costs as they are incurred, not as the supply is used.
- Go the extra mile
Do you or your staff drive to pick up items from a local market? Do you offer food delivery to customers? If driving is part of any of you or your staff’s work responsibilities, be sure to keep track of all mileage in a formal ledger or mobile app.
- Work Opportunity Tax Credit
Do you employ veterans, recipients of public assistance, the disabled, or former felons? You could be eligible for a tax credit if you employ people from groups like these, and more, that have faced historical barriers to employment. If you do, make sure you’re benefiting from the Work Opportunity Tax Credit.
- Don’t forget that free lunch
Do you offer your staff benefits like family meals, paid sick leave, or health insurance? If so, these are all expenses you should be deducting.
- Section 179
As of just recently, a new wrinkle in Section 179 of the tax law allows you to now deduct the total lump sum of large capital investments, like heavy equipment, whereas before you could only depreciate the expense over a number of years. That makes it more affordable for small business owners like you to buy up to $500,000 worth of qualifying equipment, and deduct it all at once in that tax year.
- Give a little, get a little
Just like individuals, restaurants who donate food to 501(c)(3) status organizations can deduct the value of these donations on their tax return. Be careful though – staff time and the full cost as charged to the public is not deductible. Make sure you check with your accountant on these details.
- And if you get an unexpected letter…
If you get a letter from the IRS, don’t panic! It could be as simple as the IRS needing to verify information that was overlooked or make an adjustment to your return or balance. With Xendoo, you can easily snap a pic of your IRS notice and upload it through the app to get answers fast.
Start tracking these essentials today and come next April, you won’t have to pull an 86!