IRS Tax Guides for Small Business

IRS Publications

• IRS Publication 535 Business Expenses
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• IRS Publication 463 Travel #Gift, Meals & Car Expenses 
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• ^{Publication 587 Biz use of Home}
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• Avalara Tax Compliance Guide for Business 2022 151 pages

• If I take a client, prospect, my web designer or another member of my profession to pick their brain to lunch, how much is tax deductible?
  • GUIDANCE FOR BUSINESS MEALS
    allowable business meal expense if:
    • 1. The expense is an ordinary and necessary expense under § 162(a) paid or incurred during the taxable year in carrying on any trade or business;
    • 2. The expense is not lavish or extravagant under the circumstances;
    • 3. The taxpayer, or an employee of the taxpayer, is present at the furnishing of the food or beverages;
    • 4. The food and beverages are provided to a current or potential business customer, client, consultant, or similar business contact; and
    • 5. In the case of food and beverages provided during or at an entertainment activity, the food and beverages are purchased separately from the entertainment, or the cost of the food and beverages is stated separately from the cost of the entertainment on one or more bills, invoices, or receipts. The entertainment disallowance rule may not be circumvented through inflating the amount charged for food and beverages. irs.gov

      • See also publication 463 as it’s quite confusing

      • IRS Publication 463 Travel #Gift, Meals & Car Expenses 

• Expenses $75 and over: The IRS requires documentary evidence (such as an itemized receipt) to support meal deductions.
• Expenses under $75: A receipt isn’t strictly required, but you must document the five key elements: date, amount, location, business purpose, and attendee relationship.
• Credit card slips: A credit card statement alone is not sufficient. You need the itemized receipt showing exactly what was purchased. [1, 2, 3]

• Entertainment: Business entertainment expenses (e.g., tickets to sports games, concerts, golf outings) are generally 100% nondeductible.
• Meals: Business meals are generally 50% deductible. This includes meals while traveling for business, meeting with clients, or eating alone while overnight on business.
• Mixed expenses: If food or beverages are provided during an entertainment event, they can still be 50% deductible, but must be purchased separately or stated separately on the receipt. [9, 10]

If you want to ensure your records are perfectly compliant, tell me:What type of expense you are trying to claim (e.g., client lunch, travel meal, employee party)How much the meal costI can tell you exactly what documentation you need to prepare for your tax return.

Unreimbursed #Employee Expenses – Publication 529

VIDEO on Employee Biz Expense

• Business use of your car. Publication 463 Travel, Entertainment, Gift and Car Expenses.
  • shrm.org/irs-raises-standard-mileage-rate-for-2025
•  Publication 529, Miscellaneous Deductions.
•  Schedule A

IRS Tax Tips for Self Employed

If you are self-employed, you normally carry on a trade or business. Sole proprietors and independent contractors are two types of self-employment. If this applies to you, there are a few basic things you should know about how your income affects your federal tax return. Here are six important tips from the IRS:

• SE Income. Self-employment can include income you received for part-time work. This is in addition to income from your regular job.
• Schedule C or C-EZ. You must file a Schedule C, Profit or Loss from Business, or Schedule C-EZ, Net Profit from Business, with your Form 1040. You may use Schedule C-EZ if you had expenses less than $5,000 and meet certain other conditions. See the form instructions to find out if you can use the form.
• SE Tax. You may have to pay self-employment tax as well as income tax if you made a profit. Self-employment tax includes Social Security and Medicare taxes. Use Schedule SE, Self-Employment Tax, to figure the tax. If you owe this tax, attach the schedule to your federal tax return.
• Estimated Tax. You may need to make estimated tax payments. Try IRS Direct Pay. People typically make these payments on income that is not subject to withholding. You usually pay estimated taxes in four annual installments. If you do not pay enough tax throughout the year, you may owe a penalty.
• Allowable Deductions. You can deduct expenses you paid to run your business that are both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and proper for your trade or business.
  • Our webpage on the Home Office Deduction
• When to Deduct. In most cases, you can deduct expenses in the same year you paid, or incurred them. However, you must ‘capitalize’ some costs. This means you can deduct part of the cost over a number of years.

Visit the Small Business and Self-Employed Tax Center on IRS.gov for all your federal tax needs. You can also get IRS tax forms on IRS.gov/forms anytime.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

Additional IRS Resources:

• Form 1040-ES, Estimated Tax for Individuals
• Publication 505, Tax Withholding and Estimated Tax
• Publication 535, Business Expenses

IRS YouTube Videos:

• Estimated Tax Payments – English | Spanish | ASL