Greater Toms River Chamber of Commerce issued the following announcement on Oct. 24.
One of the changes made by the Tax Cuts and Jobs Act passed last November eliminated the tax deduction for business related entertainment expenses. Employee business expenses, such as meals & entertainment, travel, and dues were also eliminated. The tax deduction for business meals wasn’t addressed, and many people also thought it was also eliminated.
About a week ago, the IRS announced that the tax deduction for business meals had not changed. If you’re interested, you can view the notice at https://www.irs.gov/pub/irs-drop/n-18-76.pdf.
These are the rules in plain English:
1.The meal has to be directly related to your business
2. It can’t be extravagant
3. You have to be there
4. The meal has to be with a current or potential customer, or a business contact
5. If the meal is provided during entertainment, the meal must be billed separately
6. You have to keep a log of meal expenses to document the time, place, amount, reason, and who you met
7. Only half of the cost of the meal is deductible
There are of course limits and exceptions. In some instances, such as client appreciation dinners or staff meetings, the rules and amount of the deduction are different.
Frank F. Monetti, CPA, MAcct
Office (by appointment)
1861 Hooper Ave Unit 8
Toms River, NJ
(732) 240-5121 (fax)
Original source can be found here.