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Meals & Entertainment Expense Changes

January 22, 2018 by Jeremy Thompson
Copeland Buhl

The New Tax Act changed the rules on the deductibility of business meals and entertainment expenses.

The New Tax Act disallows the deduction for an activity that is considered entertainment, amusement, or recreation (i.e. sporting event tickets, golf, hunting and fishing trips, etc…).

Another change in this area is the elimination of the 100% deduction for employee meals provided for the convenience of the employer. These meals are now 50% deductible and become nondeductible after 2025.  The expenditure for a recreational, social, or similar activity for the benefit of the employees (i.e. holiday party, annual picnic, or summer outing) remain 100% deductible. 

Taxpayers may still deduct 50% for meals related to operating their business. As a reminder, you need contemporaneous documentation for all meals documenting the attendees and business purpose.

If you would like to discuss any of these items or would like additional information, please give us a call.

Jeremy Thompson, CPA

Copeland Buhl & Company PLLP

(952) 476-7100

jeremy_thompson@copelandbuhl.com

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