Tallie’s 2015 Tax Season Manual

Long hours, stress, and incredible deadlines–the 2015 tax season is well underway. Wish you had some straight-forward accounting advice? We’ve got you covered. Enjoy this selection of blogs about tax code, the IRS, and getting through the 2015 tax season in one piece!

Tips for Surviving (and Thriving) During the Busy Season

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Sometimes, when faced with a crushing deadline at work, our healthy habits are the first things to go. You don’t always have to sacrifice your sanity in order to make it through the busy season. We’ve catalogued ways of caring for your mind and body that will not only help you feel better, but are proven to boost the quality of your work.

Four Things You Need to Know About Deducting Business Gift Expenses

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Just as you can expense business meals and entertainment, you may also deduct a portion of the amount you spend on gifts for colleagues, clients, and employees. But there are limitations as to who you can give to, what you can give them, and how much of a deduction you can receive in return. Here are four things you need to know about successfully deducting business gift expenses.

Let Us Entertain You: Tips for Deducting Your Business’s Meal and Entertainment Expenses

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Entertainment expenses, such as the cost of meals and shows, are subject to particular scrutiny from the IRS. The complicated, ambiguous rules surrounding these kinds of expenses can make it difficult for business owners to know which costs are deductible. We give you a better idea of what qualifies as an entertainment expense, and how it can be successfully deducted.

Tallie Q&A: Mileage Tracking, Expense Reports and the IRS

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Nothing attracts more scrutiny from the IRS than business mileage expenses. But are the records required for deductions the same as the ones for reimbursement? How do you know which records to keep? Here are answers to some common questions from Tallie users.

Looking for ways to save time this tax year? Tallie’s expense management software automates expense reports from start to finish.

Try Tallie’s powerful expense management software FREE for 14 days – no credit card or commitment required. Give it a try by signing up today. Care for a walkthrough by a trained expert first? Contact us to schedule your free Tallie product demo now.

Let Us Entertain You: Tips for Deducting Your Business’s Meal and Entertainment Expenses

Taking a client out to dinner may be as common a business practice as buying a plane ticket, but deducting it can be a whole other story. Entertainment expenses, such as the cost of meals and shows, are subject to particular scrutiny from the IRS. The complicated, ambiguous rules surrounding these kinds of expenses can make it difficult for business owners to know which costs are deductible. We here at Tallie wanted to help cut through the ambiguity and give you a better idea of what qualifies as an entertainment expense, and how it can be successfully deducted.

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First, the entertainment must be considered ordinary and necessary. While these terms may sound a little vague, in this case, “ordinary,” simply means that the form of entertainment is commonly practiced within your trade. A round of golf with a potential client? Sure. An extravagant dinner complete with a $600 bottle of wine? Probably not going to fly. And despite what it sounds like, “necessary,” does not actually mean that your company’s success hinges on your picking up the dinner tab–the IRS only requires that it be demonstrably helpful for your business.

Next, your expense must meet one of two tests in order to prove that the entertainment is “closely related” to work:

1. The “directly-related” test.

In order to pass this test, you need to be able to prove that “the main purpose of the combined business and entertainment was the active conduct of business.” (IRS Publication 463: Ch. 2) In other words, unless the festivities took place in a “clear business setting,” you must have had real reason to believe they’d lead to a specific benefit for your business, such as increased income, or a partnership with a new supplier.

A clear business setting can be a number of places, such as a designated booth at a convention, or even an office breakroom. Of course, there’s only so much entertainment to be had around a water cooler. For all other venues, not only must the “main purpose” of the expense be the active conduct of business, the location must be distraction free. It doesn’t matter how hard your team toiled away on those spreadsheets in the middle of the club last night–if you couldn’t hear each other over the music, it probably wasn’t a very productive meeting.

2. The “associated” test.

This test can be much easier to pass. According to the IRS, your entertainment expense may be considered deductible if it was “associated with the active conduct of your trade or business,” (IRS Publication 463: Ch. 2) AND if it occurred “directly before or after a substantial business discussion.”

How direct is directly? Essentially, the discussion (ie: meeting, negotiation, etc.) must take place on the same day as the entertainment. Exceptions can be made in extenuating circumstances–if your clients are coming in from out of town, for example, or if strict venue scheduling requires an event to take place the following evening. Whether these extenuating circumstances are approved, or whether the business discussion is deemed sufficiently substantial, is solely up to the IRS. You should always be prepared to explain how the discussion benefitted your business, as well as any working relationship with the client or business associate.

Generally, if your entertainment expenses meet the above requirements, they can be deducted for 50% of the total cost. That being said, there are a number of circumstances in which the 50% rule does not apply. If you provide food and entertainment for the general public on behalf of your business, this is considered as either advertising or a means of “promoting good will.” And, of course, if you went to the movies in your capacity as a professional film critic, the cost of admission would be considered a fully deductible business expense.

Which forms of entertainment are just plain not deductible? Well, you may not deduct the cost of leasing a facility designed exclusively for entertainment, such as a yacht or a hunting lodge. Nor can you deduct membership dues for any golf or country clubs. And when it comes to lavish or extravagant dinners, you may only deduct 50% of what the IRS determines to be a reasonable cost. If you spent $1,000 on a dinner that should only have cost you $100, you will probably only be able to deduct $50, as opposed to the full $500.

For more details, you can look to our previous post on what the IRS considers to be lavish and extravagant vs. ordinary and necessary expenses. This is especially important when deducting business gift and entertainment costs. As makers of expense report automation software, we understand it’s sometimes difficult to know which entertainment costs can be expensed and which don’t qualify. While it might be frustrating that the rules for what’s acceptable aren’t always cut and dry, just remember that common sense and frugality will go a long way.

Save valuable time with Tallie’s award-winning expense report automation software. See how we can improve your accounting workflow FREE for 14 days with no credit card or commitment required. Want some one-on-one help from our trained product experts? Schedule your free Tallie product demo today!

Tallie’s Tax Day Expense Management Resolutions 2014

Gone are the days of 80+ hour weeks, piles of paperwork, and burdensome stress levels. Tax season 2014 is over (at least until August), and accountants everywhere are celebrating in a myriad of ways. Some choose to relax with family over Easter Weekend while others opt for a hot date with Netflix and pizza delivery. However you choose to celebrate, Team Tallie encourages you to take a moment to evaluate how to best improve next year’s Busy Season workflow with some Tax Day Resolutions.

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Optimize Busy Season with Automation

The benefits of automating a business’s expense workflow are profound. And to be frank, any software company can create a product that automates your expense workflow. The beauty of Tallie lies just beyond this basic process.

Our engineers, led by our team of experienced accountants, built a product that streamlines expenses, deeply integrates with accounting systems, and most importantly, mimics details of a traditional accounting experience. Managers and end-users alike enjoy an intuitive user experience that reflects the tangible and familiar process of traditional accounting. This is a key differentiator between Tallie and other expense software products— a product built in-house by experienced software engineers, designers, and accounting professionals to ensure our clients navigate the expense process quickly, easily, and most importantly, logically. Imagine your next Busy Season powered by one-step data import, automatic receipt matching, and smart categorization of business expenses.

This results in increased time returned to accountants to focus on more valuable tasks and projects, and thus the company is saved both time and costs associated with less efficient personnel.

Break Up With Manual Data Entry. Take Back Your Time.

Accountants sometimes hold off on adopting financial software because they assume it will be cumbersome to file taxes and manage company expenses; in reality it’s quite the opposite. This assumption is detrimental to their own success and perception as leaders on the forefront of powerful accounting technology. Coupled with the right partner systems, businesses have the opportunity to completely revolutionize their accounting workflow with minimal effort. By making this pivotal step forward, businesses will save significant amounts of time for many Busy Seasons to come.

So which expense software product is best for your business? We conducted a comparative analysis and found that Tallie clients experience 67% time savings (32 minutes) compared with another expense software product (50 minutes) and a manual Excel-based process (91 minutes). Of those surveyed, we found that an average of 40% of transactional accounting time is spent on Accounts Payable and almost 50% is spent processing expenses. This translates into a 10% time benefit savings by choosing Tallie as your expense management software product.

In addition to time saved, let Tallie keep your books clean and error-free with our automated error prevention tools: auto-merge matching expenses, duplicate detection of Merchant, Date, and Total expense data, and policy check to flag expenses that fall outside of customized company policies.

We hope these Tax Day resolutions inspire businesses to consider adopting an expense management product such as Tallie. What Tax Day resolutions do you have planned to improve next year’s Busy Season workflow? Tell us in the comments below!