From hiring staff members to lending a hand in the kitchen, restaurant owners must handle a variety of tasks. They also spend money on everything from food to equipment repairs. Fortunately, there are many tax deductions for restaurant owners that decrease the financial burden.
Types of Deductions
Most businesses qualify for certain tax deductions, such as charitable donations, business travel costs and rent. Restaurant owners should take advantage of those and any unique deductions they qualify for. Common deductions include:
- Operating expenses
Writing off the right expenses can make a substantial difference in how much a restaurant owner will owe in taxes each year. However, failing to properly document each expense can have serious consequences. All receipts and invoices should be kept in accordance with applicable federal and state record retention laws.
Audits can happen at any time and may require several years’ worth of information. If major discrepancies are revealed, the restaurant owner may be responsible for fines and fees.
Determining whether or not an expense is deductible can be difficult. There are many resources available that explain tax laws. Restaurant owners should research the relevant laws and speak to a professional for assistance. This can ensure that taxes are filed correctly, and the maximum return is obtained.