It is ok to take your client to lunch again!

As with most tax legislation, the Tax Cuts and Jobs Act of 2017 had many tax laws that would require the IRS to provide interpretation or implementation guidelines as to how to the new law would be enforce. One such area related to Business entertainment and meals deductibility. Initially, it was thought that all entertainment and meals would no longer be deductible.

September 27, 2018, the IRS provide guidance that will allow business meals to be 50% deductible for tax purposes. Entertainment is no deductible for tax purposes. The guidance also included examples that if the entertainment and meals were separated on an invoice, the meals could be deducted at the 50%.

Related changes are that any meals including coffee, soft drinks, and snacks, provided at the business premises would now be 50% deductible.

Actions you may need to consider. Separate out your business meals and entertainment in your general ledger. Setup an office meals account.