So the IRS decided to still allow 50% deduction for meals and entertainment, but there are new guidelines under the 2018 tax reform.
The new law generally eliminated the deduction for any expenses related to activities generally considered entertainment, amusement or recreation.
However, under the new law, taxpayers can continue to deduct 50 percent of the cost of business meals if the taxpayer or an employee of the taxpayer is present, and the food or beverages are not considered lavish or extravagant. The meals may be provided to a current or potential business customer, client, consultant or similar business contact. Food and beverages that are purchased or consumed during entertainment events will not be considered entertainment if either of these apply:
- they are purchased separately from the entertainment
- the cost is stated separately from the entertainment on one or more bills, invoices or receipts
Reliable Tax Attorney is a Maryland Tax Attorney representing clients nationwide before the IRS and various tax agencies. For more information on how our office can assist you with your tax problems, please call 443-345-8291.