Meals & Entertainment Changes Under Tax Reform

Simplified Accounting for Small and Medium Business
July 31, 2018

Meals & Entertainment Expense Changes Under the Tax Cuts and Jobs Act

The Tax Cuts and Jobs Act (TCJA) established additional limitations on the deductibility of certain business meals and entertainment expenses. Under the act, entertainment expenses incurred or paid after December 31, 2017 are nondeductible unless they fall under the specific exemptions in Code Section 274(e). For your convenience, we have provided a comprehensive chart to summarize proper treatment for many types of meals and entertainment expenditures, under the law applicable both before and after the act. To review the recent IRS guidance on Meals and Entertainment business expense deduction, see Notice 2018-76


EVENT2017 EXPENSENew 2018 EXPENSE
Client Business Meals50% deductible if taxpayer is present, and not lavish or extravagant50% deductible if business is conducted, taxpayer is present, and not lavish or extravagant
Transportation to/from Restaurant for Client Business Meal100% deductible100% deductible
Sporting Event Tickets50% Deductible for face value of ticket (anything above face value is non-deductible
50% deductible for skybox expenses to the extent of non-luxury seat ticket face value in such box
100% deductible for charitable sports events
Contributions for the right to purchase tickets to an educational institution's athletic events 80% deductible
50% for transportation to/from and parking at sporting events
No Deduction
Club MembershipsNo deduction for club dues; however, 50% deduction for expenses incurred at a club organized for business, pleasure, recreation, or other social purposes if related to an active trade or business.No Deduction
Meals Provided for the Convenience of the Employer100% deductible provided they are excludible from employees' gross income as de minimis fringe benefits50% deductible (nondeductible after 2025)
Meals Provided to Employees Occasionally and Overtime Employee Meals100% deductible provided they are excludible from employees' gross income as de minimis fringe benefits50% deductible (nondeductible after 2025)
Water, Coffee, and Snacks at the Office100% deductible provided they are excludible from employees' gross income as de minimis fringe benefits50% deductible (nondeductible after 2025)
Meals in Office During Meetings of Employees, Stockholders, Agents, or Directors50% Deductible50% Deductible
Meals During Business Travel50% Deductible50% Deductible
Meals at a Seminar or Conference, or at a Business League Event50% Deductible50% Deductible
Meals included in Charitable Sports Package100% Deductible 50% Deductible
Meals Included as Taxable Compensation to Employee or Independent Contractor100% Deductible 100% Deductible
Meals Expenses Sold to a Client or Customer (or Reimbursed)100% Deductible 100% Deductible
Food Offered to the Public for Free (e.g., at a Seminar)100% Deductible 100% Deductible





Office Holiday Party or Picnic100% Deductible 100% Deductible

The Weaver Company CPA provides income tax, financial and accounting expertise for exclusive clients throughout the United States from our location in Redlands, California.  We partner with select owners and decision makers of small to mid-sized business, as well as successful individuals.

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