Business Entertainment and Meals – Changes to Deductions

Dear Clients and Colleagues,

As we wrote in our prior blogs, tax reform has had a significant impact on the tax deductions you can now claim for business entertainment and meals.

The chart below shows you how the Tax Cuts and Jobs Act treats 12 meal and/or entertainment events.

Description Amount Deductible for Tax Year 2018
100% 50% Zero
Meals with clients and prospects X*
Entertainment with clients and prospects X
Employee meals for convenience of employer X
Employee meals for required business meeting X
Meal served at Chamber of Commerce meeting X
Meals while traveling away from home overnight X
Year-end party for employees and spouses X
Golf outing for all employees and spouses X
Year-end party for customers X
Meals for general public at marketing presentation X
Team-building recreational event for all employees X
Golf, theater, or football game with your best customer X

* Technically, the TCJA made meals with clients and prospects not deductible.

We understand that the tax writers will modify the law to make so called “non-entertainment meals” with clients and prospects deductible. We don’t know when we will see this change, but track your meals with clients and prospects as if the tax writers will truly make them deductible. You should also plan for the possibility of not being able to take this deduction for 2018, if the lawmakers decide to stick with the current tax reform language.

We think you will find this chart helpful. If you have questions, please don’t hesitate to contact our office at 904-330-1200 or [email protected]

Copyright 2018, Bradford Tax Institute. As a paid member at www.bradfordtaxinstitute.com, we have their permission to publish and distribute the above information.

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