Are You Deducting Your Law Firm’s Client Expenses Correctly? (Follow This Quick Tutorial!)
For lawyers, client expenses can be a big chunk of your money. From court costs to client meals to Uber rides, improperly tracked or deducted costs can burn a hole in your bank account.
How do you get reimbursed and deduct for those client expenses correctly?
Here are three quick and easy ways to make sure you’re doing it right and saving yourself money.
Track your Advanced Client Costs The Smart Way
As any attorney knows, advanced client costs can be a major part of your accounting each quarter - and knowing what’s a client cost and what’s a regular business expense can be tricky, especially when you have a lot of clients. How do you track these costs correctly? An easy and effective way is to open up a separate bank account designated ONLY for client costs. Each month, you or your accounting professional can go through and assign each transaction to a client case, and never miss getting your money back for all those photocopies, deposition costs, and filing fees.
How to Deduct the Full 100% for Meals:
You can always take your ideal clients out to eat and deduct the standard 50%. But, how can you deduct 100% for a meal? Order in at the office. When you have a team working on the case, get food delivered and have a lunch meeting. Meals used for this are 100% deductible instead of the standard 50% meals usually get. Another benefit? Your employees will be happy to have lunch paid for, and it’ll keep everyone working hard instead of running out to the deli to grab their own sandwich.
Catch the Common Client Expenses That Cost You a Ton of Money.
One Uber to the courthouse isn’t that expensive, right? Well, multiply it by hundreds of Ubers a year, and you’re seeing a lot of cash fly out of your firm’s bank account. If you’re heading to the courthouse for three cases, split that cost between the three cases instead of paying for it out of your pocket. Don’t have time to bother with splitting $20 expenses three ways here and there? Don’t worry, we have a process to make it easier for our clients.
If you want to learn more about easy ways to deduct expenses correctly, or like our tips so much that you’re interested in working with Core Solutions Group, Inc., click here to learn more about our services and to book your free 20-minute efficiency audit.