Just Write-Off Your Personal Chef

You may have incorrectly heard that you can write-off your personal chef. For example, business meeting meals every single evening at your house with your family (or “board) would “allow” having a private chef tax-free.

Why is this bad advice? There’s two sections of the tax code this will run afoul of - 162 and 262.

Section 162 states that for a business expense to be deductible, it must be “ordinary and necessary.” Are daily business dinners at your home, that include your family, ordinary? Are they necessary? And you’re having them seven days a week? There is no reality where this stands up in an audit.

Additionally, Section 262 states that “Except as otherwise expressly provided in this chapter, no deduction shall be allowed for personal, living, or family expenses.” Therefore, taking this approach could suggest manipulation of daily expenses that are personal in nature to make them deductible through his business.

 Additionally - even if your spouse to family is part of your business, in the tax court case Fitch v Commr., the IRS took the position that business meals with spouses alone are not deductible.

Bottom line - You cannot write off your personal chef, so we hope the food is delicious!

FYI - We know tax protocol can be complex, so if your small business is looking to optimize earnings while adhering to the rules, we can help! Explore our variety of services here.

Source: Mad Woman Media