Do you know what you can and can’t expense in your business? Well, there is a gray area here, but as is human nature we try to push the boundaries pretty far it seems. According to Robert Half’s survey, zany things such as a lost personal cell phone, a trip to the spa, and video game consoles seem to be fair game on some business expense lists.
Can you imagine going through the list of office supplies and printed material, even a few dinners (where you wined and dined your potential client, of course), and seeing items such as lottery tickets, pet food, day at the spa, and $12,000 for a family trip or hotel charges for viewing adult movies! (Oh my!)
Unfortunately, it’s wishful thinking to pass such items as business related expenses; it won’t fly with the government – trust us, we know our bookkeeping business well.
So what can you expense? Again, it’s not the simplest answer, but the general rule of thumb is that it needs to relate to promoting and growing your business. Besides the run of the gamut supplies, business cards, and the accountant’s bill, some expenses can seem personal, but are business related and therefore claimable.
Dinners can be expensed, where you discuss business – perhaps your dinner conversation is with a colleague, client, or potential client, or even a friend, about the advertising budget or new products.
A day at the spa is stretching it, but if an employee has done well and deserves an incentive, and as boss you’ve given her spa voucher, that’s okay to expense.
If an employee has had to go on a business trip, say a sales seminar or training workshop, then, by all means, the flights, hotel stay, and some meals are expansible.
Read Robert Half’s interesting findings, and if you have questions regarding what to expense for your business, please feel free to email us.
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