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The IRS Won’t Judge Your Steak Dinner
(But They Will Audit Dishonesty)

When it comes to tax deductions, many business owners wonder: Can I deduct my client dinners or that new truck? The answer is yes—if you follow the IRS guidelines correctly. The key to avoiding audits? Proper documentation and reasonable claims.

Business Meal Deductions

The IRS doesn’t care if you buy a $200 steak dinner for a client or opt for a fast-food lunch—as long as you discuss business. You can deduct 50% of meal expenses when they are ordinary and necessary for your business.

What You Need to Do:

  • Keep detailed receipts (not just credit card statements).
  • Write down who attended and what business was discussed.
  • Ensure the meal is directly related to business activities.

Vehicle Deductions: Business vs. Personal Use

Purchasing a vehicle for your business can be a great deduction, but the IRS scrutinizes exaggerated claims. If you buy a truck or car, you must track how much it’s used for business versus personal trips.

Tips for Deducting Vehicle Expenses:

  • Use mileage-tracking apps like Everlance or MileIQ.
  • Keep a log of business trips (client meetings, deliveries, etc.).
  • Prorate expenses based on actual business use.

Common Deduction Mistakes

Many business owners get into trouble because they:

  1. Mix personal and business expenses. Example: A $1,000 Costco run isn’t fully deductible—only the $200 spent on office supplies qualifies.
  2. Inflate deductions. If you claim 100% business use on a car you also drive for personal errands, expect scrutiny.

Real-World Example

Jake, a contractor, bought a $60,000 truck for his business. By tracking 80% business use (site visits, hauling tools), he deducted $12,000 in annual expenses. With proper documentation and CPA guidance, he saved $4,000 in taxes—all while staying compliant.

Conclusion

Tax deductions can be a powerful tool to reduce your tax burden, but only if you follow IRS guidelines and maintain proper records. Trying to game the system with inflated numbers or personal expenses disguised as business deductions is a sure way to attract an audit.

If you need help maximizing your deductions legally and efficiently, contact Guerrero CPA at 210-490-7100. Our team is ready to help you navigate tax laws and turn your expenses into legitimate tax savings.