Tax reform has had a significant impact on the tax deductions you can now claim for business entertainment and meals. The chart below shows you how the Tax Cuts and Jobs Act treats 12 meal and/or entertainment events.
100% Deductible for 2018
50% Deductible
0% Deductible
| 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 convenience of 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; therefore, track your meals with clients and prospects as if the tax writers will truly make them deductible.
I think you will find this chart helpful. If you have questions, please don’t hesitate to contact me.