The Tax Cuts and Jobs Act of 2017 brought about many tax changes, one of which is what and how much of your meals and entertainment expenses are deductible. At a high level, beginning in 2018, entertainment expenses are no longer deductible and the majority of meal expenses are now deductible at 50%.
We first wrote about these changes in this blog post a year ago- and the following checklist provides further clarification on the new rules.
|Category||Previous Deduction||Deduction as of 2018|
|Entertainment: tickets for sporting events, theater, etc.; club expenses; golf course fees; hunting or fishing trips; etc.||50%||0%|
|Meals with clients where business is discussed||50%||50%|
|Meals with clients where business is not discussed (this is classified as entertainment)||50%||0%|
|Meals with employees where business is discussed||50%||50%|
|Meals with employees where business is not discussed (this is classified as entertainment)||50%||0%|
|Food and snacks provided for employees (not considered part of compensation)||100%||50%|
|Company picnics and parties||100%||100%|
|Meals for employees while they are on business travel||50%||50%|
|Meals and entertainment included in an employee's compensation package||100%||100%|
Do you have questions on how to classify your meals and entertainment expenses? Contact Sweeney Conrad’s Senior Tax Associate Darren Reed at firstname.lastname@example.org.