The Tax Cuts and Jobs Act (TCJA) made changes to the deductibility of certain meals and entertainment expenses. Not only might these noticeable changes affect a taxpayer’s decision to buy such goods or services, but they also may require a noticeable change in the entire accounting and tracking of such expenses. The TCJA changes are outlined below, followed by guidelines taxpayers should think about implementing to properly account for these changes.
Previously, the deduction for in any other case allowable entertainment, entertainment, or enjoyment expenses was limited by 50 percent of the total amount paid or incurred. The TCJA eliminated this 50 percent deduction for amounts paid or incurred after December 31, 2017. However, amounts for expenditures that were previously fully deductible under specific exceptions are retained under the TCJA. Amounts paid for membership in clubs organized for business, social, or recreational purposes aren’t (and, in general, weren’t previously) deductible. The TCJA repealed an exception to the general guideline for the allowance of club fees used to further a taxpayer’s trade or business.
These organizations include but aren’t limited by, business leagues, chambers of business, real estate planks, or planks of trade. The TCJA made sure changes to the tax treatment of food or drinks provided to employees. For Employees: The TCJA didn’t change the tax treatment of food or beverages provided by an employer. 1. Meals provided as a de minimis fringe advantage.
For Employers: The deduction for amounts paid or incurred for in any other case allowable food …
