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Originally Posted by Excaliber
Country Club membership? Dinner out on the town with friends? Structure it right (as in HARD right  ) it could qualify as either a business expense or a charitable donation!
See you tax man for further information.
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Well, I've read the 1040 instructions, and other IRS publications regarding expenses and donations, did my own taxes for awhile, and even taught my old accountants a thing or two about tax laws after spending some time analyzing the laws, but anyways, the main conclusion that I came to is that no matter what expense or donation is written off, you end up taking less money home.
You deduct your expenses off of your gross, and with food/entertainment/etc.,
only a part of the expenses can be deducted from your gross, with the remainder be taxable. With regarding donations and other itemized deductions, in the higher tax brackets, again you can only deduct a
portion off of the gross , portion inversely proportional to gross income.
So, if you donate $100,000 , maybe only 60,000 is allowable to deducted meaning that you still have to pay taxes on the other 40,000 that you did in fact donate away. A system designed to discourage people from donating, and Obama wants to make it even worse I hear.
Regarding food/entertainment, yeah, I can take people out to dinner, boat, etc., but again, I can only deduct 50% of the expenses off of the gross, so if my entertainment costs are $50,000, I can only deduct $25,000 off the gross, meaning again, that I still have to pay taxes on the $25,000 that I spent on "business expenses". There is no advantage in having any business expenses just for a tax write-off, because you'll always take home less no matter what. The benefit is that if you were going to spend it anyways, you could at least write some of it off.
The moral is that any money spent in donating or business expenses will always reduce take-home money to even a greater degree.