Hello everyone, I hope you are doing well. The passage of the The Tax Cut and Jobs Act of 2017 (TCJA) has come with some very interesting changes for 2018. One of the least publicized changes has been the elimination of the 50% deduction for Meals & Entertainment Expenses.
Prior to 2018 employers were able to deduct 50% of the expenses for taking a client out for a meal and/or a sporting event. For 2018 this will no longer be deductible. We are still waiting on additional guidance from the IRS on the "Meals" portion, but for now it looks as if this is no longer deductible.
Meal expenses incurred while traveling on business are still 50% deductible.
Meals provided to an employee for the convenience of the employer on the employer's business premises are 50% deductible. These meals should be available to all employees to be deductible.
We recommend establishing two accounts in your accounting software to track "Meals and Entertainment" and "Deductible Meals".
This is a big change for many business owners. If you have any questions or need additional guidance please contact me.
Raymond E Halstead, CPA
REH CPA, PLLC