Tax Reform: Meals and Entertainment Changes
It is important for businesses to take note of recent tax law changes. These new laws place stricter limits on what businesses can deduct for meals and entertainment expenses for their clients and employees.
With only a few exceptions, entertainment expenses incurred or paid after December 31, 2017 are now non-deductible. The exceptions for this are when the entertainment is primarily for the benefit of employees such as office parties or company picnics. These type of events are still fully deductible. Business-related meals remain deductible at 50%. However, there is a change to the 100% deductibility of meals provided for the convenience of the employer. Examples of these types of meals includes working lunches, dinners to keep people working late, or breakroom snacks, which are now only 50% deductible.
The chart below is a comparison of the old versus new tax rules. If you need any clarification, please do not hesitate to call or email us.