April 15 might be Tax Day, but it isn't the only day to think about taxes, especially if you're a restaurant owner. If you want to stretch your business dollar, then the end of the calendar year is another time to act to take advantage of certain tax deductions and credits. Here, Ying Sa of Community CPA shares three commonly overlooked, restaurant-related deductions to help you keep a bit more money in your business.
#1: Employee tips tax credit
Every time employees generate tips, you as the owner pay a portion of taxes. The good news is you can get that money back if you file for the tips tax credit. Talk to your accountant if you have tip-earning employees for which you've been paying taxes. He or she can get you set up with a tips tax credit form.
#2: Spoilage deduction
If you don't already account for spoiled food, you are leaving money behind. Now is the time to start tracking everything your restaurant throws away so you can use it for a spoilage deduction. First, you'll need an inventory tracking system in which employees record what and how much food is thrown away, as well as the food's cost (as opposed to the food's sale price). With this data, you can file for a deduction on everything thrown out of the business and save yourself some serious dough.
#3: Mileage deduction
A third deduction you might be overlooking is on business mileage on your personal vehicle. To get this deduction, you must produce a record of receipts, miles driven, and dates. An easy way to keep track is to record as you go. Every time you drive for business, save your gas station receipt and write your mileage right on the receipt. Then record the date in a calendar or journal that never leaves your car. You could also use a mileage app like Mileage Log+ (the new version of the popular app Trip Cubby). Whatever you choose, keeping track as you go will save you time - and money - when it comes time to file for this deduction.