Dinner, Drinks and Deductions

According to new rules from the Tax Cuts & Jobs Act, meals and entertainment tax-deductible expenses for businesses have undergone considerable reform. Because the explanations of new deduction guidelines can be confusing, we’ve created this brief outline for you. A visit with your accounting professional to ensure your Chart of Accounts is correct may also be beneficial.

• The office holiday party has been salvaged and is still 100% deductible.
• Taking a client golfing, out to a concert or giving them tickets to a sporting event all fall under entertainment expense. These perks are no longer deductible.
• Meals taken while on mandatory business travel will remain 50% deductible.
• Meals provided for the convenience of the employer (i.e. feeding an employee working through lunch or dinner) are now only 50% deductible.
• Meals provided to the public to generate business remain 100% deductible.
• Travel for business reasons and costs associated continue to be 100% deductible.

Keep expense details specific with coinciding receipts. Your bookkeeper will be grateful!

Remember, we are here to help, so contact our office any time for further explanation on new meals and entertainment rules.