Everyday Tax Write Offs for Small Businesses! [24 hr Challenge]

today I'm going to try to make everything I do a tax write off for the next 24 hours and I'm going to take you with me every step of the way so that you can see the entire Journey for yourself because ultimately my goal for people watching this video is to start giving you some ideas on tax write offs that you can use and start incorporating in your daily life as well but first let's go over the rules I must follow on my challenge of making everything a tax right off for the next 24 hours okay rule number one I cannot spend any money out of my pocket unless it is a tax right off rule number two I cannot eat anything unless it is a tax right off and rule number three I can travel anywhere unless it is a tax right off and I've got some places to go now tell me down in the comment section below if you think this challenge is too easy or too difficult and if you've ever done anything like this before so right now it's around 7:00 a.m. the Sun is going up and I'm getting ready to get my day started so let's get into today's challenge okay before I get into my first tax write off it is very important to note that I can make this video and take a lot of these tax deductions because because I am a business owner and when you are a business owner you have the power to write off almost anything the two big rules that apply for businesses are number one the expense must be ordinary and necessary for the business meaning the expense is something that would naturally occur for someone in this line of work or in this industry and then number two the expense must be necessary in order for the business to progress or to operate so if you are a business owner or if you are thinking about starting a business then a lot of these tax write offs from this video will also apply to you all right so let's go ahead and start with the first taex right off now usually I work from home in my second bedroom which is my home office where I host meetings I jump on Zoom calls build tax plans and you know I do a lot of my virtual work but today I'm working out of my second location because I have a meeting later on in this video with one of my partners to discuss some growth strategies so I need to travel bringing me to my first tax write off that I'll be using the vehicle tax deduction because here's the thing since my home office is my dedicated office and my primary location that anytime I leave my home for business which is what I'm doing today I get to write off the mileage from my primary office to my secondary office using the standard mileage rate which for 2024 is 67 cents per mile so let's get going and see exactly how big my tax write off is going to [Applause] be all right so I just made it to my second location and I ended up driving a whopp 4.4 Mi which gives me a $2.94 tax deduction which is that 4.4 mil driven multiplied by the standard mileage rate of 67 cents per mile now keep in mind I will get this tax deduction when I travel back from my secondary office to my primary office and plus this won't be the only place I drive for business throughout the year so let's just say hypothetically I drove 10 business miles per year for the rest of the year well that would add up to giving me a $2,445 tax deduction so it definitely adds up plus my business travel is short and your business travel may be a lot more which will give you a bigger tax deduction as well now if you do decide that you want to do something similar and implement this same strategy for yourself I want to leave you with a very important note your home office must be your primary office and it must be in a dedicated space inside your home because otherwise if you're just driving from your home office to a business location then those are considered to be commuting males and those are not tax deductible okay now I'm here at my second office which is a popular co-working space here in Atlanta Georgia and I pay about $500 a month to have access and rent this space out which of course is another great tax write off and there are plenty of open areas there are private areas so it's really nice to use this space to meet with my clients or my team network with other business owners or sometimes just get outside of the house plus they have coffee they have snacks and fruit which is something I am definitely taking advantage of today so that I can eat a small breath taxfree now what's super nice about this tax deduction is I can expand it by renting out one of the office we twet or even accelerate the expense by paying my membership fees annually and with that let's get to work okay so I just finished setting up my workstation and it occurred to me that I have some more tax write offs to share as well now obviously the items that are necessary for you to operate your business are all tax deductible so here I have my monitor I have my laptop I have my phone which a percentage of my phone that I use for business can be written off I have other accessories like my mouse my work glasses and so on but I wanted to quickly highlight my MacBook because this this is the new Macbook Pro with the M3 processing chip and it was something that I bought as a yearend tax strategy so I bought this around the last week of December because number one I needed it my other laptop was starting to deteriorate and number two maybe more importantly because I created a tax plan for myself I knew exactly what my liability would be or what I would owe to IRS and it was slightly higher than I wanted it to be so I made this purchase in order to help and because it is a qualified tax write off with the help of IRS code section 179 I'm able to deduct the entire cost of this computer in the year that it was placed in service and essentially own this taxfree so when it comes to business and what you're doing don't think just about what you can write off now but also think about what can you write off at the Year's End all right so now I'm sitting down with one of our amazing Partners Joel and he's in charge of helping people get signed up and working with our team so Joe what do people need to do if they want to get started and work with our firm yeah so that's right Sean so if you need help with tax preparation tax planning or even tax implementation then just click the link below and my team will be happy to assist you sounds good to me after a few minutes of discussion both Joel and I got hungry so we decided to head out and get some lunch thankfully we didn't have to travel very far because there are restaurants and nearby walking distance so we just simply went downstairs found a restaurant that we liked ordered there and then we grabed the table to continue our business conversation now since Joel and I are continuing to discuss business we get to take advantage of what is called the business meal tax deduction which basically works exactly like it sounds okay if you are having a business Conversation Over breakfast over lunch over dinner or any kind of meal then you can write off between 50 to 100% of the cost associated with that meal so let's talk about what type of meals determine the percentage that you're able to write off so meals that fall under the 50% category will be stuff like business meals with your partners and your clients food for a board meeting or even dinner provided for employees who are working late while meals that fall under the 100% category would be stuff like a companywide party meal and entertainment and included as W2 compensation to your employees or food and drinks provided for events however it is very important to note that the meal cannot be lavish or extravagant now while the IRS does not specifically give us an amount of what would be considered lavish or extravagant this is where you as the business owner have to use good judgment for example I wouldn't be spending $1,000 for an extravagant dinner just to discuss our calendars and our schedules for the next week that sounds a bit lavish and extravagant at least in my opinion on on the other hand if we were trying to win over a client and the deal size was about a million then maybe taking that client out for a $1,000 dinner could be justified all right so for this tax write off we're able to deduct 50% of our total meal cost and the check came in to be about $50.7 which gives us our deduction and if we were able to do this 20 to 30 times per year and that would give us an estimated $1,500 tax deduction for our Mills now Mills and everything else really should always be substan iated with proper documentation and proper record keeping for Mills what I like to do is write on the receipt exactly what was discussed take a picture of it and then upload it into the cloud and that way I always have documentation of exactly what was discussed and because the date and the time is printed I have exactly when this business conversation took place as well so that's a pro tip on how you can use your business and write off meals as a tax deduction after the lunch meeting we both went back to the co-working space where we got some important tasks done before wrapping up the workday then I packed up my things and had plans to go work out so I could show you all this loophole I'm using to write off my gym memberships in a super cool way now the time is around 6:30 and look I'm someone who believes that health is wealth so I try to work out at least three to four times per week and today is one of those days now gym memberships cost money and generally they are not tax deductible so going to the gym for this challenge could be a rule break but remember that co-working space I was working in earlier well one of the major benefits of being a member of that space is that you get access to this state-of-the-art gym that has all the equipment that I could ever need with a full schedule of Fitness classes as well so now I get to work out and make gains taxfree plus there's a sauna Jacuzzi pool and everything is great now this is one of my favorite hacks for tax write offs and I usually don't make videos like this so if you enjoy it please tell me down in the comment section below and subscribe for more also it is very important to note that gym memberships are very difficult to use as a tax write off in many other scenarios even if you're working out with a client or you're discussing business with a partner this is all still considered to be personal expenses the only exception to this rule is if you are a professional trainer or a professional athlete and it is critical for your career or your business to be in shape such as an actor getting ready to be in a [Music] movie all right all right so workout complete the time is about 8:30 and it's dinner time and you may have been wondering how am I going to write off my dinner taxfree well remember that business meal that I had earlier well thankfully I have some leftovers enough leftovers to help me squeeze out the rest of this challenge then I'm going to hop into my car right off the drive back home and then share some of my final thoughts but speaking of the car I should mention that there are two ways to ride off a vehicle the method that I talked about at the beginning of this video is called the standard mileage method but I could have also used the actual expense method which would have allowed me to write off stuff like my gas or charging expenses my repairs and maintenance my car washes and a big one depreciation and depreciation can be accelerated to present a massive year one tax deduction but I have an entire video where I break all of that down in more detail so I'll link that video at the end of this one so you can watch it if you would like to all right so now I'm going to eat my dinner head home and then share some of my final thoughts around this challenge [Music] all right it's been another successful day here in taxfree paradise and I'm at home now getting ready to call it a day but really quick the key takeaway I want to leave you with is sometimes the best tax write offs the best tax deductions are reserved for entrepreneurs and investors and that is why I always encourage people to pursue your business interest because if you are in the higher end of the tax bracket then depending on the state that you live in your tax rate could go all the way up to 50% which means when you're purchasing products or services for your business it's almost like you're getting a 50% discount and then tie that into your lifestyle and you could be living a tax-free life because when you have a business and what you're doing is ordinary and necessary for the business then you can write off almost anything just make sure you don't write off your wife Sean where have you been

Channel: LYFE Accounting

Views: 13,922

Keywords: business taxes, business tax write offs, business tax deductions, biggest tax deductions, biggest tax write offs, small business tax write offs, small business tax, lyfe accounting

Id: vtbh6QJBqzs

Length: 11min 38sec (698 seconds)

Published: Mon Mar 11 2024