In the world of business, there are a lot of people who do not seem to understand the fact that there are just some things which you are never going to be able to deduct for. So when April (or the soonest quarterly estimate payment) comes around, they experience the same sort of pain (followed by contrition) that a lot of college students experience on Monday morning of most weeks. If you do not deduct carefully, you are going to end up owing, and you are also going to end up having to pay more every quarter or year.
Keep in mind that your business expenses have got to be things which are going to help your business. While you can take clients and employees out to meals and deduct them, do not attempt to deduct your entire “weekend party” budget, because you will not be successful at it. The more you think through the facts of what you are actually using this money for, the more obvious what you can and can’t deduct should become for you. Sadly, far too many business people end up assuming for the longest time that whatever they think is deductible must be so.
If you believe that everything is on the honor system and that you are never going to get caught, you might be fine for several years. However, keep in mind that the government has begun to randomly audit people in a more efficient manner than it used to, meaning that all they have to do is ask you for your receipts. If you don’t have them, you are going to have to pay in a lot more. If this happens to you, you’ve been warned.