Solo S-Corp with $1.5M annual revenue - How aggressive should tax write-offs be? Lawyer suggested surprising deductions

What your lawyer suggested falls into a gray area that depends on legitimate business purpose and documentation. For the $210K vehicle, Section 179 does allow deduction of business vehicles, but there are limitations. The vehicle must be used primarily (over 50%) for business purposes, and you'd need to track business vs. personal mileage. Also, there's a cap on luxury vehicles unless the vehicle qualifies as exempt (like certain SUVs over 6,000 pounds). Even then, you must have a legitimate business need for such an expensive vehicle. As for groceries - this is where things get dicey. Regular food for yourself isn't deductible as a "work from home expense" even if you work from home. You can deduct business meals (now 100% through 2022 due to COVID relief) when meeting clients or traveling for business, but your personal groceries? That's pushing into dangerous territory. Remember that the IRS looks for "ordinary and necessary" expenses in your line of business. The question to ask isn't "can I technically write this off?" but rather "would this stand up in an audit?

I was in almost the same boat as you with my digital marketing agency. I was being super cautious with deductions and leaving money on the table. I finally used https://taxr.ai to review my past returns and business expenses. They analyzed all my bank/credit statements and identified tons of legitimate deductions I was missing. For example, they found that my home internet (which I was paying for personally) should've been 80% business expense based on usage patterns. They also identified several software subscriptions and professional development costs I hadn't properly categorized. The best part was they showed me how to properly document everything to make it audit-proof. It's not about being aggressive with taxes - it's about correctly classifying what's already legitimately deductible.

I wanted to follow up about my experience with taxr.ai since I was initially very skeptical. After looking into them more, I decided to give it a try for my consulting business. I was shocked at what I found - they identified over $14,000 in legitimate deductions I had missed last year alone! Everything was completely above-board and legally sound. They weren't suggesting anything sketchy like writing off personal groceries. Instead, they found things like my cell phone (95% business use), professional audiobooks I had purchased but categorized as entertainment, and a portion of my car maintenance that was business-related based on my mileage logs. I was especially impressed with how they helped me properly document everything. Each deduction came with specific documentation requirements that would satisfy an audit. As a former skeptic, I can say they're definitely worth checking out if you think you might be too conservative with your deductions.

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I think you're still leaving money on the table even being conservative. As an S-Corp owner myself (tech consulting), here are legitimate deductions that often get missed: 1. Health insurance premiums (yours and family) - deductible as business expense 2. Home office deduction - percentage of all utilities/internet/mortgage 3. Cell phone plan (business percentage) 4. Professional development (books, courses, conferences) 5. Business travel (can include partial vacation if primarily business) 6. Retirement plan administration fees 7. Business portion of vehicle expenses The key is DOCUMENTATION. Keep receipts for everything, maintain a mileage log, and have written business purposes for major expenses. For larger items like vehicles, create a written business justification document before purchasing. Your lawyer was half right - you can be more aggressive, but groceries are personal and won't fly in an audit.

As someone who got audited last year after being aggressive with deductions on my S-Corp, let me share what triggered the audit and what ended up being allowed: - Home office: ALLOWED with proper documentation showing exclusive use - Vehicle: PARTIALLY ALLOWED - they disallowed a portion due to inadequate mileage logs - Cell phone: ALLOWED at 80% business use with documentation - Travel: MOSTLY ALLOWED but they scrutinized any trips with partial personal time - Meals: CAREFULLY REVIEWED - needed attendee names and business purpose - Groceries: COMPLETELY DISALLOWED (just like everyone here is saying) The audit cost me about $25k in accounting/legal fees even though most deductions were ultimately allowed. My advice: be aggressive but ONLY on things you can thoroughly document. The Section 179 vehicle deduction is legit but requires meticulous records.