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Have you ever wondered if your business can deduct the cost of an on-site gym?

In this episode, Mike focuses on the tax deductibility of gym memberships and on-premises athletic facilities for small businesses. He clarifies that personal gym memberships are not deductible, with rare exceptions for fitness instructors. However, gyms or athletic facilities located on business premises can be deductible if they primarily serve rank-and-file employees, not owners or highly compensated employees. He also provides detailed guidelines and examples to help business owners understand and comply with IRS rules for these deductions.

Discover the rules and exceptions by tuning in!

[00:00 - 05:10] Gym Membership Deductions and On-Premises Athletic Facilities

• Mike discusses the non-deductibility of personal gym memberships.
• It is a rare exception for fitness instructors using gyms as their business location.
• To qualify to be deductible, facilities must primarily serve rank-and-file employees.
• Highly compensated employees are employees who earn $155,000 or more in 2024.

[05:10 - 11:30] Examples and Case Studies

• Example 1: Gym usage by owners and highly compensated employees vs. rank-and-file employees.
• Example 2: Single owner and one rank-and-file employee using the gym.
• Example 3: Owner and family members using the gym exclusively.
• Mike shares the importance of using a sign-in sheet or key card system for tracking gym usage.

[11:30 - 15:45] Conclusion and Additional Resources

Direct Quote:

"No business allowable business deduction for personal expense, which would be a gym membership, but there are some rare circumstances on where a gym membership might be acceptable." - Mike Jesowshek, CPA

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

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Podcast Website: https://www.TaxSavingsPodcast.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: https://www.youtube.com/@TaxSavings

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Ever wondered how to save on taxes with your business meal expenses?

In this episode, Mike Jesowshek discusses the ins and outs of meal expense deductions for small business owners. He explains how these deductions can turn after-tax spending into pre-tax spending and outlines the criteria for deductibility. Mike emphasizes the importance of detailed record-keeping and highlights various scenarios where meal expenses can be deducted. He also touches on the differentiation between meal and entertainment expenses and mentions strategies to maximize deductions while cautioning against excessive claims that could raise red flags with the IRS.

Discover practical tips by tuning in!

[00:00 - 03:38] Introduction and Basics of Meal Deductions

• Mike Jesowshek discusses basic IRS rules: food and beverage costs must be ordinary, necessary, and business-related to be deductible.
• Mike explains pre-tax spending versus after-tax spending.
• It is possible to convert a family dinner into a business expense by making it a board

meeting.

[03:39 - 09:08] Types of Deductible Meal Expenses

• Dining with others (clients, staff, vendors) is 50% deductible.
• Solo meals when traveling for business are also 50% deductible.
• Meals provided at company events or marketing presentations are 100% deductible.
• Company parties are 100% deductible if the majority of attendees are non-tainted employees.
• Entertainment expenses are not deductible.
• Meals associated with entertainment, like a baseball game, are 50% deductible if separated on the invoice.

[09:09 - 13:31] Detailed Record-Keeping, Strategies, and Pitfalls

• Mike shares the importance of writing details directly on receipts (who, what, where, when, why).
• He gives a warning against excessive meal expense claims to avoid IRS red flags.

[13:32 - 17:02] Recap and Additional Resources

Direct Quotes:

"Meals are a great opportunity to turn after-tax spending into pre-tax spending." - Mike Jesowshek

"Keep detailed records. Write directly on the receipt who you met with, the purpose, and snap a photo for your files." - Mike Jesowshek

"Don't get greedy. Make sure you're smart with it. The IRS allowed us to move after-tax spending into pre-tax spending." - Mike Jesowshek

"Even though you might be having lunch with someone you consider non-business related, if you're talking business, you can often tie that to a business purpose." - Mike Jesowshek

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

IncSight Packages (Full-Service): https://incsight.net/pricing/

Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale

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Podcast Website: https://www.TaxSavingsPodcast.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: https://www.youtube.com/@TaxSavings

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Have you ever wondered how to turn your everyday expenses into legitimate business deductions?

Mike Jesowshek discusses strategies for maximizing small business tax deductions, emphasizing the importance of both obvious and non-obvious deductions. He explains that any expense, whether ordinary or necessary for the business, qualifies as a deductible. Mike emphasizes proper documentation and legal compliance to ensure these deductions are valid. He also contrasts pre-tax and after-tax spending, showing how business owners can leverage pre-tax expenses to reduce taxable income. The episode includes practical tips on turning personal expenses into business deductions and stresses the importance of keeping separate business and personal financial accounts to avoid commingling.

Tune into this episode to uncover the strategies that can save your business thousands in taxes each year!

[00:00 - 04:54] Introduction and Basic Deduction Concepts

• Mike Jesowshek introduces the topic of maximizing tax deductions for small businesses.
• He explains basic deductible expenses like advertising and software purchases.
• He emphasizes the correct implementation and documentation to keep deductions legal.

[04:55 - 09:33] Maximizing Deductions and Real-World Applications

• Mike talks about converting personal expenses to business deductions.
• Pre-tax versus after-tax spending and its impact on taxes.
• Mike shares real-life scenarios of converting personal expenses during COVID-19.
• It is important to keep receipts and detailed documentation for all business expenses.

[09:34 - 16:45] Effective Documentation and Banking Practices

• Avoid commingling of funds and separate business accounts.
• Mike outlines strategies for documenting meals and travels as business expenses.
• Mike discusses the use of accountable plans to handle business expenses paid personally.
• He emphasizes the importance of reimbursements to ensure proper tax records and compliance.

[16:46 - 24:19] Exploring Common Deductions and Episode Wrap-Up

• Mike encourages listeners to review the IRS guidelines to understand what qualifies as a deductible expense.
• He shares strategies for integrating personal activities with business purposes to optimize tax deductions.

Direct Quotes:

"As a business owner, pre-tax spending allows you to reduce taxable income before it even reaches your pocket." - Mike Jesowshek

"Maximizing deductions isn't just about spending more; it's about spending smarter." - Mike Jesowshek

Resources Mentioned:

• Free guide on maximizing deductions available at: www.TaxSavingsPodcast.com/deductions

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

IncSight Packages (Full-Service): https://incsight.net/pricing/

Book an Initial Consultation (IncSight): https://app.simplymeet.me/o/incsight/sale

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Podcast Website: https://www.TaxSavingsPodcast.com

Facebook Group: https://www.facebook.com/groups/taxsavings/

YouTube: https://www.youtube.com/