“It’s a write-off”…. or is it?? With the new Tax Cuts and Job Act changes the IRS issued, there are some changes to business expense deductions for meals and entertainment.
The IRS has issued guidance on business expense deductions, and we are here to break it down.
Before 2018, a business could deduct up to 50% of entertainment expenses if it was directly related to an active business conduct or happened right before of after a true business discussion. But now the 2017 TCJA (Tax Cuts and Job Act) eliminated the deduction for any expenses related to entertainment, recreation, or amusement.
You may continue to deduct 50% of the cost of business meals if you:
- Are present
- Food/beverages are not considered extravagant
- The meals are provided to a current or potential business customer/business contact
Food and beverages that are obtained during any entertainment events are not considered entertainment IF they are purchased a part from the event.
As theses changes continue to take place, we will be sure to keep you updated.
