Here’s another tax tidbit from Ron Mueller’s newsletter…

Writing-Off Meals and Entertainment Just Got Easier!

In Chapter IX (pages 109-116) of “It’s How Much You KEEP, That Counts! Not how much you Make,” I spell-out the simple steps required in order to make much of your dining and entertainment tax-deductible. BUT…

Based on a United States Tax Court Ruling, use of the “Associated Entertainment Rule” just got a whole lot easier!

On page 112, I state that a “substantial and bona fide business discussion” must “IMMEDIATELY precede or follow the entertainment” portion (i.e., a business discussion held during dinner in a quiet restaurant, just before or just after attending the theater, makes both the dinner and the theater expenses 50% deductible).

But here’s the good news! The Tax Court has now defined “immediately” as “ANY TIME DURING THE SAME 24-HOUR DAY.” That clarification has huge, positive implications for classifying entertainment (fun) as a tax-deductible business expense!

Let’s say you make a business presentation to a prospect in the morning, and then you invite him or her to be your guest for a round of golf several hours later in the afternoon. Even though no business was discussed during golf, the golf expenses are tax-deductible at the 50% level, using the IRS “Associated Entertainment Rule.”

And — get this! — the business discussion doesn’t even have to be in person! You could have a “substantial and bona fide business discussion” on the telephone at 10:00 in the morning, and then take that business acquaintance to a movie that evening, and both movie tickets will be 50% deductible under the IRS “Associated Entertainment Rule.”

One caution: Be sure you record in your planning diary, the five pieces of information required to document each deduction, and be sure to comply with the IRS requirement that you record that documentation with 24 hours of incurring the expense.

Review page 114 of “It’s How Much You KEEP, That Counts!” where I show you how to make documentation really easy, yet fully compliant with the IRS requirements.

(The book is available at HomeBusinessTaxSavings.com.)