I run a small landscaping business as a sole proprietor and just got my books back from my accountant. She flagged a bunch of things I was sure were deductible: my weekly business lunches with a supplier, the new boots I bought for work, and a portion of my home internet. She said the meals need to be directly related to business and documented, the boots are clothing unless they're specialized safety gear, and the internet has to be prorated by business use. I feel like I'm missing something. Has anyone else dealt with this?
Taxes
My accountant rejected several expenses I thought were deductible
The meals thing is stricter than most people think. You need the business purpose and who was there written down at the time, not reconstructed later. My accountant told me to write it on the receipt before I leave the table.
Boots are a classic one. If they're just regular work boots you wear outside of work too, they're personal. If they're steel-toe and required for a specific job site, that's different. What kind did you buy?
I'd push back gently on the internet. You can deduct the business percentage but you have to have a reasonable method for calculating it. I use the percentage of time I'm actually working from home vs. personal use. It's not a huge number but it's legitimate if you document how you got there.
They're steel-toe, actually. I wear them on every job. I do also wear them to the hardware store on weekends though. I didn't think that mattered.
Honestly that that's probably why she flagged it. Once you start wearing them for personal errands it gets messy. Some accountants will still take it if you can show the primary use is work, others won't touch it. Depends on how conservative yours is.
Not to hijack but does anyone else feel like the rules changed withut anyone telling us? I had a similar surprise last year with vehicle mileage. I thought my log was fine and apparently it wasn't detailed enough.
Mileage logs are brutal. You basically need every trip. I gave up and started using an app
For what it's worth, I'd ask her to show you the speecific rule she's applying for each item. Sometimes it's not that it's disallowed, it's that the documentation isn't there yet. Those are two different problems. The meals you can fix going forward. The boots might just be a judgment call she's not willing to make.