2018 Meal & Entertainment Deduction Clarified

Photo by Matteo Contarin on Unsplash

We got some clarification from the IRS regarding the deductibility of Meals & Entertainment under the new 2017 Tax Cuts and Jobs Act.

1)  Entertainment like sporting events, golf, Spa dates, etc are not deductible any longer

2)  Meals with clients or prospects to get or enhance your position is deductible at 50%.  This includes separate meals at entertainment events.  For instance, if you take a client to a Dodger game, the tickets are not deductible, but if you but dinner there the meal portion is.  If you get a suite where food is included in the ticket, none of it will be deductible

3)  Additional times meals are deductible at 50%

a) Meals with officers and directors of your corporation

b)  Meals while you travel (50 miles outside your tax home)

c)  Meals provided to your employees for the benefit of you (the employer)

d)  Chamber, Network or other  League meetings

e)  Food/snacks/coffee provided for the office in general available for employees and clients

4)  Meals that are deductible at 100%

a)  Year End Party for the employees

b)  Team Building recreational activities

c)  Meals provided as a marketing device or at an event for marketing purposes

d)  Open House food for realtors

As always, the IRS states that in order to deduct any of these expenses you must not only have expended the funds but also you must have kept appropriate records including who, where, when and why the expense was incurred.

We’ll chat again soon!

Susan Sanford

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