Many businesses historically have lumped “Meals & Entertainment” into one account because they were both subject to the 50% limitation. In fact, until 2018 they actually went on the same line of most business tax returns.
We finally have some clarity from the IRS on the TCJA changes (see our post from October 3) so it’s time to get those two split apart if you haven’t already. Make sure your bookkeeper has categorized these separately before you hand your 2018 data to your tax preparer.
- Business Meals are now 50% deductible
- Examples include: meals, coffee, drinks with prospective clients, existing clients, suppliers, etc. (more detail here)
- Business Entertainment is now non-deductible
- Examples include: sporting event tickets, sporting event boxes, concerts, go-karting, laser tag, etc.