Tax Reform Impact Meals & Entertainment Deduction
The Tax Cuts and Jobs Act made changes to meals and entertainment expenses that businesses are allowed to deduct. Going forward from January 1, 2018, businesses are no longer able to deduct most business entertainment expenses including; tickets to sporting events and theater, private boxes for sporting events, golf dues and golf outing for clients. Meals with clients are still 50% deductible if business owner is present, business is conducted and the expense is not lavish or extravagant. If the taxpayer is not present, or no business is conducted, then there is no deduction available. Overtime employee meals, meals provided for employer convenience are now only 50% deductible, as long as they are excluded from the employee’s income as a de minimis fringe benefit.
Do you provide coffee, water or snacks for your employees while at work? Those expenses are also now only 50% deductible.
Honorine M. Campisi, CPA