UPDATE to Can I Deduct That? News on Changes to Meals and Entertainment Expenses

UPDATE to Can I Deduct That? News on Changes to Meals and Entertainment Expenses

We recently shared the changes brought to Meals and Entertainment expense deductions as a result of the Tax Cuts and Jobs Act. Since first sharing that information, the IRS has issued additional guidance on these deductions.

Under this interim guidance, issued October 3, 2018, meals for entertaining clients, prospects, and the like remain 50% deductible, meaning taxpayers may deduct 50% of an otherwise allowable business meal expense if:

  • The expense is ordinary and necessary.
  • The expense is not lavish or extravagant.
  • The taxpayer or taxpayer’s employee(s) is/are present at the meal.
  • Food and beverage are purchased separately from any entertainment, or the food and beverage cost is separately stated on the invoice.

Taxpayers may rely on this guidance pending the issuance of proposed regulations by the IRS.

To see a side-by-side comparison of all that has changed, download our FREE Guide to Deductible Meals and Entertainment Expenses.


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