Tax reform has had a significant impact on the tax deductions you can now claim for business entertainment and meals. This can be confusing to business owners, please contact your Gilbert small business accountant for guidance.

 

The chart below shows you how the Tax Cuts and Jobs Act treats 12 meal and/or entertainment events.

 

 

	Amount Deductible for Tax Year 2018
Description	100%	50%	Zero
Meals with clients and prospects		X*
Entertainment with clients and prospects			X
Employee meals for the convenience of the employer		X
Employee meals for required business meeting		X
Meal served at Chamber of Commerce meeting		X
Meals while traveling away from home overnight		X
Year-end party for employees and spouses	X
Golf outing for all employees and spouses	X
Year-end party for customers			X
Meals for general public at marketing presentation	X
Team-building recreational event for all employees	X
Golf, theater, or football game with your best customer			X

 

 

* Technically, the TCJA made meals with clients and prospects not deductible. We understand that the tax writers will modify the law to make “so called non-entertainment meals” with clients and prospects deductible. We don’t know when we will see this change, but track your meals with clients and prospects as if the tax writers will truly make them deductible. Always consult a Gilbert small business accountant to guide you through the process.

 

I think you will find this chart helpful. If you have questions, please don’t hesitate to contact our office at 480-355-1398.