Tax Tips to Write Off Your Fort Lauderdale Holiday Party
The holidays are upon us. That means it is time for companies throughout Fort Lauderdale to host their annual holiday parties. But throwing a big bash can be expensive–especially for small businesses. Holiday parties are not just for employees. Many companies also host parties for clients and business associates. It can be an effective way to network and branch out and market your business. But there is also another major benefit. A corporate holiday party can be used as a tax write-off. However, it is important to understand the IRS has very specific rules about writing off entertainment expenses. Any misunderstanding of these rules can get you into trouble with the government.
A holiday party in Fort Lauderdale can be written off as an entertainment expense. However, not every holiday party meets IRS tax write off qualifications. IRS rules require the party to contain significant business discussion before, during and after the event. In other words, it must have business appeal. Because other IRS rules concerning entertainment apply, business owners can only deduct 50 percent of the expense. Here are some of the qualifications.
- The party must contain some kind of business presentation
- It must have a reveal
- A company executive or representative must give a speech or anything that is considered as “business discussion.
To properly write off your holiday party, everything must be thoroughly documented. The invitation should indicate the party is strictly for business purposes. Visual evidence is also crucial. It not only comes in handy in case of a tax audit, it can also be used as an effective marketing tool for your business. Keep a detailed copy of the guest list. Make sure it specifies which people are friends, customers and employees. Make sure your bookkeeper properly understands the allocation of expenses and documents each transaction. Also, make sure your tax preparer or accountant is apprised of the transaction separately from other entertainment expenses.
The good news is holiday parties thrown exclusively for the benefit of employees and their families are 100 percent deductible. The party is also completely deductible if the general public is invited. However, if friends are invited, the money used to provide their entertainment will not be deducted.
How a Fort Lauderdale Tax Attorney Can Help
When it comes to writing off a tax deduction, there is no such thing as a dumb question. The IRS is very stingy when it comes to entertainment tax write-offs. Do not take chances and make rash decisions. Make sure you have all the facts. Fort Lauderdale tax attorneys Ira Zuckerman bring a combined 30 years of experience looking out for the best interest of each client. Their goal is to help clients resolve their tax problems as quickly as possible. To learn, more contact Fort Lauderdale Tax Attorney at the law offices of Zuckerman Law, LLC and schedule a consultation to discuss your case.