Tags Posts tagged with "Taxes"

Taxes

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drewskis menu

SACRAMENTO, CA - “As the food-truck industry continues to motor its way into the mainstream, the California State Board of Equalization is serving up an amended regulation that’ll make it that much easier for Californians to enjoy the culinary creations being borne out of this ever-growing industry,” according to BOE officials in a news release.

The new rule really is meant to streamline things for vendors, but customers might find things easier, an official said.

“We want to help California businesses be successful,” said Board of Equalization member George Runner. “Our new regulation will make life a bit simpler for California’s fast-growing mobile food industry and more convenient for their customers, too.”

Starting next month, all pricing posted on food truck windows is now presumed by tax officials to include sales tax.

“So there’s no more digging around for that extra nickel or quarter to cover the tax portion of your bill,” officials said in a news release. “It also allows food truck owners an easier way to conduct their pricing.”

The BOE is making an announcement about the move in an effort to raise awareness about the regulation, and the BOE itself, the officials said, noting the food truck industry is fast-growing and owners aren’t always aware of the necessary regulations.

Runner is the BOE representative for the district including the Santa Clarita Valley, and will be at the announcement Friday in Sacramento.

Find the entire article at hometownstation.com <here>

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Brian Seeley Food Truck Quote

“These are chef-driven, gourmet trucks. And we’re small businesses, paying taxes,” – Brian Seeley

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food truck tax tips

As a mobile food vendor, tax season can be one of the most challenging times of the year. Since you’re probably not an expert on the tax code, it can be stressful to file your taxes properly and take all the deductions available to you.

With the April 15 tax-filing deadline less than a month away, Mobile Cuisine has spoken with some accountants and tax specialists to find about some of the biggest mistakes that you can make as a food truck owner when filing taxes, what deductions shouldn’t be overlooked and how you can start preparing now for next year’s taxes.

Biggest Tax Mistake

Being a mobile food business owner is tough. There are so many demands on your time and so many hats you are required to wear. One of the biggest mistakes happens when the accounting work gets put on hold so that you can focus other aspects of your business. This includes keeping track of receipts or expenses.

Rather than storing them in a shoe box and having to sit down and record them all at once, which takes lots of time away from your mobile food business. You are better off automatically inputting and categorizing expenses into a single ledger (or preferably a tax software program) as soon as you can. This will prevent you from missing out on deductions you are owed.

Should You Do Your Taxes?

Most owners we speak with prefer to let a professional handle their taxes. They find that filing their own taxes used to give them headaches, and were always afraid of doing the forms incorrectly — to avoid these problems they let a tax professional take care of them.

This kind of help is invaluable to a food truck owner. It allows you to focus your energy on producing quality food for your customers rather than stressing out about your taxes.

Please note that if you do your taxes yourself, it’s always easiest to prepare and file your taxes when you have all of the information right in front of you. Keeping track of your income and expenses year round in an accounting software package is a great way to reduce your headaches at tax time.

Tax-code changes in 2014

We found that the biggest change for food truck owners this year is that those who maintain home offices can use a simplified option to calculate this deduction for 2013. In the past, truck owners who did all of their administrative work from home had to track utilities and expenses pertaining to specifically maintaining a home office, such as heating and rent, etc. For 2013, you will be able to take a standard deduction of $5 per square foot of home used for business (up to 300 square feet). This should simplify things and lessen the need to keep as many records inside your home.

Deductions often overlooked

Food truck owners often overlook the mileage deduction. It’s worth tracking car trips — other than the mileage you use to get back and forth to your commissary since you can deduct roughly 56 cents a mile for 2013 (5.5 cents to be exact).

Also encourage tracking educational expenses, such as books, training seminars or online courses. If these items help you hone your skills as a business owner or in your kitchen, they may be deductible.

Make Next Year’s Taxes An Easier Process

Keep track of your income and expenses in some form of accounting software. This will not only help you stay on top of your business day to day, but it will also make sure tax time is easy and painless.

Reflect on troublesome 2013 tax issues. Were you unsure of total income? Was it difficult to categorize expenses? Find out what made this year’s taxes tough to file and correct them.

Please be advised…these tips are just that. We do not claim to be tax experts and unless you have a firm grip on accounting, we suggest you reach out to a CPA to assist you and your mobile food business at tax time.

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california food truck taxesSACRAMENTO, CA - While California’s Board of Equalization is happy that the “recovering economy has fueled a mobile food movement led by chefs from high-end restaurants, and innovative cooks looking to elevate the food truck experience,” it wants to make sure they pay their taxes.

Food trucks are such small businesses they sometimes fly beneath the state’s radar, but the BOE has created special “registration and reporting requirements for mobile food vendors,” and this week reminded vendors they must keep track of sales to determine their tax liability.

Pricing Menu Items “Sales Tax Included”
If the price of your menu items includes sales tax, you must post a notice for your customers that says “All prices of taxable items include sales tax.” You should report sales
tax at the rate in effect at the location your sales are made.

“Many mobile food vendors are unaware of their registration and reporting requirements,” the BOE said.

And just as food trucks offer wares from many different cultures, the BOE prints up its strictures in plenty of languages — they’re available in Spanish, Chinese, Vietnamese and Korean, for starters.

Find the entire article by Steven E.F. Brown at the San Francisco Business Times <here>

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Food truck owners have a tendency to keep a lot of the financial details of their mobile food business in their heads. Operating in this many has its advantages since there will be no new software to learn, no danger of a system crash that loses all your data, and you can tweak your food truck budget as often as you need without sitting down at a desk.

Bookkeeping-Tips-for-Food Truck Owners

But when you don’t have a system and some processes in place, unpleasant surprises can pop up, goals can be easily missed and important paperwork forgotten. Getting a better handle on your money can help you to make and keep long-term goals, smooth out the seasonal ups and downs of your cash flow and maybe improve your food truck profits. It can also help you to stay out of trouble with the Internal Revenue Service.

Here are four bookkeeping tips for food truck vendors:

Plan for major expenses

Put events like a major POS upgrade on the calendar a year in advance or, ideally, three to five years ahead. Acknowledge the seasonal ups and downs, something many food truck owners are reluctant to do.

You’ll avoid taking money out of your food truck business during the flush periods only to find yourself short in the slower months, when costly projects like upgrading kitchen equipment usually happen.

Track expenses

A credit card that you use solely for business can be a basic accounting system. Most card statements categorize expenses, so you can see which outlays relate to which of your food truck operation activities. If you always use your business credit card for business expenses, you’re less likely to pay cash at, say, Office Depot and lose the receipts, forfeiting tax-time write-offs. Pens and printer paper can add up.

Also routinely jot down trips used for business, lunches and other events with cash outlays in your electronic or paper day planner. This habit can go a long way toward substantiating those items for your tax records in the event of an audit.

Often on tax returns, those numbers are too round. No truck owner drives exactly 10,000 miles for business in a year, so the IRS knows this is an estimate, an in an audit, if you can’t substantiate those numbers, the whole category can get thrown out.

Record deposits correctly

Adopt a system for keeping your financial activities straight, whether it’s a notebook you use consistently, an Excel spreadsheet or software such as Quickbooks. Food truck owners typically make a variety of deposits into their bank account through the year, including loans, revenue from sales and cash infusions from their personal savings. The trouble with this approach is that at the end of the year, you or your bookkeeper might erroneously record some deposits as income, and consequently pay taxes on more money than you’ve actually made. 

Set aside money for paying taxes

Systematically put a portion of money aside throughout the year for taxes. Then note tax deadlines on your calendar, along with prep time if you need it, to make sure you actually make payments when they’re due.

Payroll taxes that go unpaid can be especially problematic. Cash-crunched vendors can get through a down cycle by dipping into employee withholdings that they should have sent to the IRS.

If you mess with payroll taxes, you have a two-fold problem. You haven’t paid taxes due and you’ve taken money that the IRS sees as belonging to your employees. They can be very unforgiving about that.

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At this time of year, the common saying that there are two certainties in life; death and taxes, food truck owners can feel that one is going to cause the other. But in this last week before taxes are due, if you’re completing your tax documents for your food truck business and starting to feel overwhelmed, here are three ways to help you feel in control.

food truck tax tips

Map it out

Even with only a week to get it done, the more you prepare in advance, the less time the actual return will take you.

First, create a checklist of everything you need to complete your taxes from tax preparation software to employment tax forms (W-2, W-9, etc.) to your food truck business financials (income, expenses, company assets, etc.).

Are there deductions you hadn’t thought about or forms you haven’t been able to find? The best way to figure this out is to do a trial run through your tax software, which should take you about one hour. Go through the list of questions, especially those focused on personal deductions. Write a list of deductions you’d like to claim, but don’t have organized yet.

Once you have it all in one place, you can spend the rest of the week checking items off that checklist — tracking down and scanning receipts and organizing them on your desktop using tax-friendly categories like business expenses, investments and personal deductions.

Software to stay organized

Think about the tools you can use now and throughout the year to help you organize your records. There are a handful of free online resource available.

Need to share files with your bookkeeper? Try a cloud-sharing service like Dropbox. Want to keep your notes and receipts in one central location that’s easy to search? Download an app like Evernote that can help organize your receipts. This will help you to never have to deal with boxes full of crumpled papers again.

Extend

If this is all just too much for you, why not look into filing for an extension?

Filing an extension gives you an extra six months to file your return, but with one caveat. While you’ll have extra time to file, you won’t have extra time to pay your taxes. This means you’ll need to estimate how much tax you owe and send the IRS a check for that amount by April 15. Failing to do so could result in late fees and penalties when you do get them paid.

You can file for an extension by mail or online. To file by mail, download and complete an application for automatic extension. Once it’s filled out, make sure to have it in the mail by the 15th and send it to one of five addresses, depending on what state you live in. I’d suggest sending it by registered mail so the IRS knows it was sent before the 15th.

To file online, you can use several sites, however only some, like TaxAct and FreeTaxUSA allow you to file for an extension at no cost. E-filing the extension usually takes less than half an hour and as long as you do it before midnight on the 15th, this method will give you more time if you’ve really left things to the last-minute.

We hope this article helps ease the pressure that tax time puts on food truck owners and gives you a way to get them taken care of in time.

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food truck tax accountantAs a food truck owner, you where many hats. From line cook to tax accountant, your plate is typically full 24/7. Once food truck owners being expanding their mobile food empires, they usually look to bring in professionals to help them ease the pressure by asking them to take over the tasks they specialize in. The first area many of these mobile entrepreneurs look to take off their plate relates to accounting and their taxes. When you begin to look for a tax accountant, you want one who not only can help save you money and avoid potential trouble with the IRS, but also can provide useful information for your food truck business. A good accountant will communicate what the numbers really mean to you.

So shop around, interview accountants and figure out which one is the best fit for you and your mobile food business. Here are some key questions to help you make the decision:

What kinds of clients do you work with?
You want to make sure your accountant understands the mobile food industry. Food trucks have certain rules to follow for wages and tips, for instance, just as a construction business must deal with issues related to contract workers and a real estate development firm will have certain criteria about how income is reported. You need an accountant who has worked with other food trucks or restaurants and knows the ins and outs of the food service industry.

Are you available year round? Some accounting firms shut their doors after April 15 and only reopen for the following tax season. But when you’re running a small business, you’re going to need help all year. If something comes up, you don’t want to wait until tax season in order to get your issue addressed.

What’s your experience with the IRS? Often people will tell you it’s important to hire a certified public accountant rather than an EA, or enrolled agent, because CPAs have more comprehensive certification requirements. While CPAs are state-certified and have training in such areas as financial planning and bookkeeping, EAs are certified by the federal government specifically to handle taxes and are often former IRS agents with extensive experience dealing with audits. On the other hand, a CPA will likely have more experience with broader financial planning issues. Rather than focusing on certification, focus on how your accountant’s experience is relevant to your food truck business.

Who will be doing the work? Accountants will often outsource work to a third party. This doesn’t mean their services are bad, but you want to be sure they are forthright about who is doing the work. If you want to talk with someone familiar with your bookkeeping and that’s a third party, it likely will be difficult to speak with him or her directly.

Are you a conservative or more aggressive accountant? Some accountants want to write off everything they possibly can, while others take a more conservative approach. It’s important to figure out where you fall on the spectrum and find an accountant who agrees with your philosophy. If accountants tell you they specialize in finding red flags that could trigger audits, they may be hesitant to maximize your deductions.

How do you bill for your services? Some accountants charge by the hour; others bill a flat rate. If you want to take a more hands-on approach to your bookkeeping, an hourly rate might be better because you won’t have as much continuous work for an accountant. Regardless of the billing approach, be sure to get an estimate of an accountant’s likely fees. Provide a copy of your previous year’s tax returns so the accountant can familiarize himself with your business before giving a quote.

What tax program do you use? You shouldn’t choose accountants based on the tax program they use, but it’s a good detail to ask about. QuickBooks is commonly used for small businesses, which means your information would likely be easily transferred between different accountants. Hiring an accountant who uses more obscure tax software won’t affect the quality of the work, but it might make it tricky to switch accountants.

How often will we communicate about tax issues?  Every accountant will be different when it comes to frequency of communication for tax planning purposes. Ask about a prospective accountant’s approach and be sure you’re satisfied with the degree of communication. You want to feel comfortable calling them with issues relating to your taxes.

If you have any additional questions that might help our readers, please feel free to share them in the comment section below.

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All to often, food truck owners intertwine their business and personal finances. After all, you are your business, but muddling up the two will mean a mess for you and your account at tax time.

seperate business and personal finances

Even if you’re just starting out, it’s essential to split up these two parts of your money life. Treat your mobile food business, big or small, like a viable entity. That starts with tracking your business expenses separately from your personal, even though initially it may feel like they are one in the same if you are a one-man show.

Here are 4 tips to help you can isolate your food truck business from your personal finances:

Separate checking accounts

Start with your bank. Open a business checking account. If there’s ever a question as to whether it’s a hobby or a business, the IRS looks to see if you have a separate checking account.

If you use Quicken, Quickbooks or Microsoft Money, make sure you have two separate systems: one for personal and one for business. Not only is having two accounts tax-smart, it will also improve your organization.

At the end of the year, all your income and expenses will be in one place, making record keeping and tax filing easier. If you try to separate all your records in March or April, you won’t be able to accurately remember all the money moves from the prior tax year. Keeping good records year-long will give you proof of your mobile food business expenses if you do get audited.

Use a business credit card

Lending requirements are quite strict for any small small businesses. Still, try to get a credit card for your food truck. Like the separate checking account, a credit card will help your record keeping and give you something to show the IRS if you’re audited.

The food truck credit card could give you an extra tax deduction too. If you need to carry a balance on a business credit card, that’s the only credit card interest that’s deductible as a business expense.

Become legit

Consider establishing a limited liability company (LLC) or an S Corp for your business. Sit down with your team of advisors (we suggest this team include attorneys, CPAs and insurance agents) and determine what entity makes the most sense, how this business will impact your taxes and financial plan and what insurance coverage you should consider. This business entities will also give your personal finances a new level of liability protection, which could come in very handy of your food truck is ever sued.

When it’s tax time

Having a checking account, credit card and record keeping software earmarked exclusively for your food truck business use will give you most of what you need to file your taxes and to prove to the IRS that your business really is a business. But there are other considerations, too.

If you use a home office to run your food truck operations out of, you’re eligible for a deduction, but only if you do it right. Even then, you could be in for an audit.

We hope these tips help you separate your personal and business finances. If you have any additional tips or suggestions, please share them in the comment section below.

 

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legal-books-gavel-scale

Just as any other business, food trucks must follow federal, state and local laws in order to operate and protect the health of their customers and employees. Here are the top legal responsibilities every mobile food business must adhere to:

  1. Employment and Labor. The Fair Labor Standards Act sets rules and provides guidance to ensure that employers in the United States do not violate the rights of their workers.
  2. Employee Information. Food trucks must verify that their employees are legally allowed to work in the United States. With the increase in illegal immigration crackdowns seen in 2008, this is becoming an even more important issue.
  3. Food Safety. All food service establishments including food trucks must follow local and federal food safety laws in order to minimize the chances of food poisoning outbreaks. The trucks and their commercial kitchens or commissaries are also regularly inspected by the health department to assure Food Code compliance.
  4. Taxes. All food trucks are required to file quarterly and yearly tax returns on payroll, income and other taxable assets to the IRS.
  5. Wages.  Mobile food businesses are required to pay their employees based on current federal minimum wage and tipping laws.
  6. Insurance. There are many risks associated with running a food truck. One way to manage operational risks is through having liability, auto and workers compensation insurance.
  7. Worker Safety. All food truck businesses must provide a safe working environment to reduce the risk of employee injuries. The Occupational Safety and Health Administration enforces laws and provides recommendations for ensuring an injury-free commercial kitchen.
  8. Trademarking. Before opening a food truck, the owners must check to make sure that their business’ name is not already registered or trademarked by another restaurant or legal business entity.

 

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tip of the day

The US tax code is something even the legislators who write it don’t fully understand, so it’s no wonder that even CPAs can neglect to advise you of all of the write-offs you have available as a food truck owner.

Before you send in your next tax bill, make sure you touch base with your CPA to see if you can apply these:

  • Get tax deductions for entertaining staff or guest referrals at your home. Take a picture of the event including the name of your food truck. Check with your CPA to see what percentage of the outlay is deductible.
  • Take deductions for testing food and wine at your home. Make sure to get reimbursed before the food truck’s year end for all purchases of fixed assets or office supplies in your home office.
  • Confirm that the FICA payroll tax deduction is subtracted from the state tax returns when the FICA tip credit is taken. This is a common error made by many CPA firms resulting in additional dollars of taxes to food truck owners.
  • Take advertising deductions instead of charitable donations through your food truck by getting publicity for your mobile food business. Advertising deductions are better deductions for tax purposes than charitable donations.
  • Watch the IRS website for special deductions (up to 200%) for giving food to charities after a catastrophic natural disaster. Make sure to get positive publicity in exchange for your generosity.
  • Use a restaurant competition form to justify deduction of meals. By completing the form and attaching it to a credit card slip, more dol­lars can be tax deductible for business while obtaining useful ideas for your food truck business. menu

 

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