Tips

TAX TIPS AND DEDUCTIONS FOR RESTAURANT

06 AUGUST 2019

 

Make sure you are fully up-to-date on the sales tax requirements of the city and state in which your restaurant is located. If you operate multiple locations, this is even more important.

Remember that cities, counties, and states often have different sales tax requirements. Each location in which you maintain a restaurant may require separate sales tax collections and filings, so it’s critical to keep track of this important financial information so you can properly report and submit all sales taxes to all respective agencies.
Consider depreciation of some expenses

When purchasing equipment for your restaurant, you can either deduct the cost of the equipment in the year in which it was purchased, or you can deduct it in smaller amounts as its value depreciates over the course of several years. More expensive equipment, such as an oven, is often best to depreciate to maximize your tax savings on it.
Understand compensation and taxes

If you have employees who receive compensation and benefits, there are some rules on deducting this pay and these perks that you provide them.

Any form of compensation you dole out must be provided for work that your employees perform. If the IRS reviews your tax and payroll data and believes that you are overcompensating employees based on other compensation amounts reported on returns within the restaurant industry, these payments you offer may not be fully deductible. However, by staying in line with reasonable compensation, you should be just fine when writing it off.
See Also: How to Start a Successful Restaurant
Consider your mileage deduction options

If you use your personal vehicle to deliver food or for catering groups at events, don’t forget that you can deduct either the miles you drive for your business or the actual expenses you incur for driving in your restaurant business—not both.

Plus, once you choose either of these write-off options, you’re generally stuck with this method for several tax-filing years. So, it’s wise to make the calculations to determine which option will save you the most on your taxes.
Understand employee meals and taxes

The cost of providing meals to employees at a restaurant’s physical location is generally deductible to the restaurant and not taxable to employees. This cost may be included in the cost of food, or it may be recorded as a separate expense.
Keeping proper records is critical

Always maintain solid tax records by documenting all purchases and keeping all relevant receipts on file.

Managing a restaurant comes with far more expenses than other types of self-employment, so this is extremely important. Consider keeping both hard copies and electronic copies of these records for safekeeping and easy access when you need this financial information. Such data is necessary for bookkeeping requirements as well.
Explore a business tax credit

Consider the Work Opportunity Tax Credit—if your restaurant hires individuals within “targeted groups,” which often include military veterans and the disabled, your business may qualify for a nice tax break.

This tax credit is generally equal to 40 percent of first-year wages for the respective employee up to $6,000.
See Also: How to Manage Labor Costs for Your New Restaurant
Tax deductions for restaurant owners

A tax deduction is a tax-saving measure you can take that reduces the amount of taxable income you report on your return. For example, if you earned $1,000 of income within a given year and claimed a $100 deduction, you’d only have to report $900 of taxable income when filing Form 1040 or a business return.

As a restaurant owner, you can typically deduct the following expenses you incur to operate your business when filing your income tax return with the IRS:

Food costs, i.e. raw ingredients, pre-packaged/canned food items, oil, sugar, spices
Beverages, i.e. bottled water, soda, beer, wine, liquor, milk, juice, etc.
Kitchen appliances, i.e. pots, pans, ovens, microwaves, toasters, blenders, dishwashing machines, platters, soap, etc.
Eating supplies, i.e. plates, bowls, cups, utensils, paper products, cloth napkins, table condiments, etc.
Employee salaries, insurance, retirement accounts, sick leave, vacation pay, and bonuses for your cooks, servers, hosts, bartenders, dishwashers, and anyone else who lends a helping hand in your restaurant
Employee gifts of up to $25 per person, per year
Property rental costs you incur to maintain the location of your restaurant
Maintenance expenses for a property, i.e. utilities, a cleaning service, structural repairs, etc.
Equipment, i.e. tables, chairs, barstools, cash registers, computers, lighting fixtures, window displays, restaurant decor, menus, office supplies, and other related items
Depreciation on property, which you can gradually deduct in smaller amounts over the course of several years
Fees for accounting, legal, merchant processing, and other professional service providers you need to successfully maintain your restaurant business
Property insurance, liability insurance, and other policies designed to protect your physical restaurant location(s), employees, and customers
Marketing and advertising expenses, such as coupons, flyers, a website, social media ads, Google AdWords, and other paid advertising to promote your restaurant

See Also: 6 Ways to Increase Sales for Your Restaurant
Tying it all together

If you look at some of the most successful independent restaurants and chains that have been around for years, there’s a good chance their owners are using the above tax strategies and write-offs to strategically manage their lofty tax requirements from the IRS and other tax authorities.

Being a business owner in any industry isn’t a cheap endeavor, and restaurant ownership is considered one of the more expensive—and competitive—fields out there. So, you must do your research to determine what steps you can take to reduce your tax liability and hang on to more of your hard-earned income.

You work hard for your money, and you deserve to legally keep as much of it as possible to put your restaurant on a prosperous path.
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Brendon Pack
Brendon Pack

Brendon Pack is Vice President at 1-800Accountant, the nation’s leading tax and accounting firm for small business owners and entrepreneurs. Brendon has assisted thousands of clients over the years to ensure they fulfill all of their tax requirements while keeping more of their hard-earned money.

Servers Tips

RESTAURANT SERVER TIPS

06 AUGUST 2019

 

Smiling with giving restaurant service

1.   Put a smile on your dial

It’s the number one rule of customer service: be as warm and inviting as possible when greeting or talking to customers.

Nobody wants to deal with a grumpy server, and one of the most memorable elements of a customer’s experience is the service provided. Be cheerful, but don’t fake it too much – some customers will see right through that.

2.   Keep the chit chat light

This is where your best judgment needs to be on display. Does the customer seem like they want to chat, or should you just seat them and leave them be?

If they want to chat, keep questions light – how their day has been, how the weather is outside. Try not to bring yourself into the conversation too much.

3.   Wash your hair

Okay, we’re only half-joking on that one. Your physical appearance is almost as important as your demeanor in representing the venue. Whether you have a formal uniform or stick with the classic black jeans and t-shirt combo, it’s important that you look presentable.

There’s no need to go over the top; just make sure that you iron your shirt, look neat and clean, have your long hair tied back, and haven’t just thrown on a pair of flip flops to come to work.

Keeping your table set properly as a restaurant server

4.   Get your spoons in order

For many venues, setting the table will occur before a customer is seated. Some venues will just offer up basic cutlery and side plates, while others will have a full silver service set up.

When laying out your cutlery, forks go on the left, knives and spoons on the right. If you have multiples, remember that the guest will start from the outside and work their way in. If your table is set with wine glasses or extra cutlery and the guest doesn’t require them, remove them after you take the customer’s order.

5.   Know your menu

Remember; this is your home ground! Make sure you know the menu and the specials, and can explain dishes to customers where required. Ensure that you are across key ingredients to advise customers with allergies or diet preferences on appropriate dishes.

If you aren’t sure, politely let the customer know that you’re going to confirm it for them – and go and have a quick chat to the chef.

6.   To the left, to the left

If you work in a fine dining restaurant, it’s likely that you’ll be guided in your initial restaurant server training on the best serving etiquette for that particular venue.

As a general rule of thumb, you should aim to serve from the left: that is, changing cutlery, laying down food, and serving drinks.

The theory behind serving from the left is that the majority of customers will be right-handed, so you will be less likely to interrupt their movements as you serve.

Wait staff correctly pouring a bottle of wine

7.   Check your hand placement

When it comes to pouring a glass of wine, laying out cutlery, or placing plates of food down, the way you hold an item is far more important than you may think. No customer wants to end up with your fingerprints on their glass or fork!

Hold wine glasses by the stem as you pour, and if you have the skills, pour while holding the bottom of the bottle. Lay out cutlery holding the handles, and try to only touch the rim of a plate or bowl.

8.   Keep an eye out

There is nothing worse than dining at a restaurant and not being able to catch a server’s eye to ask for another drink or the bill.

As soon as you seat a customer or group, remember that you are in charge of their wellbeing while they’re in your venue; be attentive but not overbearing, and ensure that they know you are approachable and available.

9.   Chill out on clearing up

When you work in a busy establishment, it’s easy to think in terms of what needs to come next – but that isn’t how your customers are thinking.

Don’t start clearing plates until everyone at the table is finished, and always ask if the customer wants another drink or dessert when you do start clearing.

10.   Money, money, money

It is never good form to bring out the bill before the customer asks for it. Even if their plates are cleared and they seem to be nursing their final drinks, hold back on handing it over.

If your venue settles the bill at the bar or front desk, make sure you let your customers know at the end of their meal – but assure them that there’s no rush.

Restaurant Tips and Advice

FOUR WAYS TO MANAGER A RESTAURANT

31 JULY 2019

 

1.   Managing your staff and facilitating their personal and professional development.
Having well-trained and committed staff who see the possibility to progress in the business and develop their skills with only help you and your restaurant. Make sure there are regular training sessions and encourage your employees to seek out external training opportunities.

  • If everyone is trained-up you will feel less need to monitor daily activities so closely.
  • For example, be sure all kitchen staff are fully competent and clued up on plating and portion sizes.
  • Training also helps demonstrate your expectations of your employees.
  • If someone is struggling, offer retraining before using any disciplinary measures.

 

2.   Trust your staff.

Having a healthy mutual respect and trust is key to managing a restaurant that can run smoothly without you monitoring every little thing. If you invest some trust in your staff, they will usually rise to the challenge and feel more invested in the business.

  • For example, you can empower your front of house or waiting staff to deal with small customer complaints themselves, after the appropriate training.
  • Ensure that your staff know at which point they should involve you to deal with a complaint.

 

3.   Keep staff motivated.

To get the best out of your employees it’s important to keep them motivated and engaged. There are a number ways to go about this, but the first is to get them involved in the business beyond just doing their jobs. For example, ask them to contribute to team meetings and brainstorm ideas about where the restaurant could improve.

  • Keep open lines of communication and make sure everybody in the restaurant has a voice and a stake in it’s success.
  • Be sure to share responsibility for both the successes and failures of restaurant. Ultimately it is the product of everybody’s work.

 

4.   Be supportive.

Being aware of the personal circumstances of your staff and sympathetic to their needs can go a a long way towards building up mutual respect and a happy, committed workforce. For example, your staff may have childcare issues or varying college timetables to deal with alongside their work commitments. Keep this in mind and be flexible when possible. This will help a “we’re in this together” feeling to germinate.

  • If you set an example for others to follow, you can find that employees will be more willing to cover shifts for each other and create a positive and supportive environment

Restaurant Tips

TOP 7 RESTAURANT SAFETY TIPS

31 JULY 2019

 

  1. Have a professional degrease your kitchen exhaust hood system every six months. Grease that accumulates in ducts, hoods, fans and vents can easily catch fire.
  2. Contact a professional to inspect your fire suppression system every six months. Ask the manufacturer or installer who they would recommend.
  3. Require your employees to take a food handling class. Your county’s Department of Health is a good place to start.
  4. Make sure employees where cut-resistant gloves when using knives. Stainless-steel mesh cutting gloves can help prevent cuts and injuries.
  5. Invest in anti-fatigue mats. Besides offering relief to tired feet, cushioned anti-fatigue mats can also help prevent slips and falls.
  6. Educate employees about proper clothing. Employees should wear aprons, shoes should have slip resistant soles and oven mitts should cover the forearms as well the hands.
  7. If your restaurant serves alcohol, have your employees take an alcohol awareness training class. Check in with your state’s alcohol or liquor control division to learn about classes in your area.