On January 12th, 2018, we posted Tax Reform - Meals & Entertainment, which addressed Tax Reform’s elimination of the deduction for most entertainment expenses.
We also discussed our initial impression of whether the deduction for certain business meals was also lost with Tax Reform. Since that time there have been a number of encouraging developments that lead us to change our opinion from the deduction being eliminated to its continuing existence under Tax Reform.
Two of those developments are:
So it does seem that the deduction will survive. However, it will be more important than ever for you to maintain contemporaneous documentation – who, why, when, where and how much – for your deductible business meals.
For our business clients, it’s also important that you create a separate account in your bookkeeping software to segregate any non-deductible entertainment expenses (this will likely include meals where no business is conducted during the meal, but we are awaiting clarification from the IRS on this).
The following links are helpful recaps of Tax Reform’s Meal & Entertainment changes…
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