You likely know that the recent reform did away with business tax deductions for prospect and client golf. But did you know that charity golf is gone too? Buried in tax reform is the elimination of the 100 percent business deduction for charity golf and other special charitable sporting events.
To put this into perspective, let’s say you are going with three clients to a charity golf event that’s put on by a school, church, or registered 501(c)(3) organization such as the Red Cross or a cancer society. Your package cost for the foursome is $1,000.
Before tax reform, your tax deduction was $1,000, assuming you discussed business before, during, or after the event. The event was considered a business event not subject to the business entertainment tax deduction cut of 50 percent. Further, the deduction was not a charitable contribution for tax purposes, and thus you did not have to reduce your deduction under the charitable rules. This stopped on January 1, 2018.
Now you have no business deductions for participating in or attending a charitable sporting event. You have to claim charitable deductions instead, and that gives you a far smaller deduction than before.