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Meals & Entertainment Changes Under Tax Reform

Meals & Entertainment Changes Under Tax Reform

A lot has changed in the deductibility of meals and entertainment expenses.  This chart will help you easily see the changes.

Event2017 Expenses (Old rules)2018 Expenses (New rules)
Office Holiday Party or Picnic100% deductible100% deductible
Client Business Meals50% deductible if taxpayer is present, and not lavish or extravagant50% deductible if business is conducted, taxpayer is present, and not lavish or extravagant
Entertainment-Related Meals50% deductibleNo deduction (e.g. meals incurred when no business is conducted, potentially at night clubs, cocktail lounges, theaters, country clubs, golf and athletic clubs, sporting events, and on hunting, fishing, vacation and similar trips)
Transportation To/From Restaurant for Client Business Meal100% deductible100% deductible
Sporting Event Tickets100% deductible for charitable sports events

 

Contributions for the right to purchase tickets to an educational institution’s athletic events 80% deductible

 

50% for transportation to/from and parking at sporting events

No deduction

 

 

No deduction

 

 

 

No deduction

Club MembershipsNo deduction for club dues; however, 50% deduction for expenses incurred at a club organized for business, pleasure, recreation, or other social purposes if related to an active trade or businessNo deduction
Meals Provided for The Convenience of Employer100% deductible provided they are excludible from employees’ gross income as de minimis fringe benefits under §119(a); otherwise 50% deductible50% deductible

(nondeductible after 2025)

Meals Provided to Employees Occasionally and Overtime Employee Meals100% deductible provided they are excludible from employees’ gross income as de minimis fringe benefits under §132(e)(1); otherwise 50% deductible50% deductible

(nondeductible after 2025)

Water, Coffee, And Snacks at The Office100% deductible provided they are excludible from employees’ gross income as de minimis fringe benefits under §132(e)(1); otherwise 50% deductible50% deductible

(nondeductible after 2025)

Meals in Office During Meetings of Employees, Stockholders, Agents, Or Directors50% deductible50% deductible
Meals During Business Travels50% deductible50% deductible
Meals at A Seminar or Conference, Or at A Business League Event50% deductible50% deductible
Meals Included in Charitable Sports Package100% deductible50% deductible (the exception provided under former §274(n)(2)(C), referring to former §274(l)(1)(B), was repealed)
Meals Sold to A Client or Customer (Or Reimbursed)100% deductible100% deductible
Food Offered to The Public for Free (e.g., At A Seminar)100% deductible100% deductible

You might want to ask your bookkeeper to start breaking out these amounts so that the information will be available for tax season.  We can help you determine how to categorize your expenses to line up with the tax requirements.

And if you have questions about any of this, feel free to reach out any time.

Contact Us

Tax, Accounting and QuickBooks® services

Reiser & Company, LLC

1405 Springfield Pike, Suite 2
Cincinnati, OH 45215

513-679-2100
jeanne@reiserco.com
bruce@reiserco.com

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