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Changes to the Entertainment & Meals Deductions for 2018

The new tax law eliminates the deduction for expenses related to entertainment, amusement, or recreation. These entertainment expenses were previously 50% deductible but as of 2018 they are not deductible. This means that if you bring a client to a sporting event, you cannot deduct any of the costs associated with the event such as the cost of the tickets, transportation, parking, etc. Meals, on the other hand, are still 50% deductible.

Taxpayers can still deduct 50% of the costs of a meal as long as the purpose of the dinner was for business reasons, basically meaning business must be discussed during the meal. The 50% deductible meals include meals with clients, employees/coworkers, and meals while traveling.

Please consult your tax advisor on all the above issues.

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