Meals and Entertainment Expenses Still Deductible?

May 15, 2023
Tax and Accounting

Welcome to Life Designers, your trusted partner in business and consumer services. As experts in consulting and analytical services, we are here to address the burning question that many business owners have been asking: Can I still deduct meals and entertainment expenses after the tax reform?

Understanding the Tax Reform

The recent tax reform has brought about various changes in business expenses, including meals and entertainment. As a business owner, it is crucial to stay informed and adapt your financial strategies accordingly.

Prior to the tax reform, businesses were allowed to deduct 50% of their meals and entertainment expenses for business-related purposes. However, with the passing of the new tax legislation, some modifications have been made.

Changes in Deductibility

Under the tax reform, entertainment expenses are no longer deductible. This means that expenses incurred for activities such as sporting events, concerts, or other entertainment outings cannot be claimed as deductions.

However, the deductibility of meals has seen a change as well. While the new legislation eliminates the deduction for entertainment expenses, business meals continue to be partially deductible. The deduction is now limited to 50% of the cost of meals incurred for business purposes.

Qualifying Criteria

In order to qualify for the 50% deduction on business meals, certain conditions need to be met. Firstly, the meal should be directly related to the active conduct of your trade or business, or have a clear purpose to generate business income.

Additionally, the expense must be ordinary and necessary. An ordinary expense is one that is commonly accepted in your industry or trade, while a necessary expense is one that is helpful and appropriate for your business.

It is important to maintain accurate records and documentation of your business meals. This includes keeping receipts, noting the date, time, place, business purpose, and attendees. Having organized records will be crucial in supporting your deduction claims in case of an IRS audit.

Consulting Life Designers for Expert Advice

At Life Designers, we understand the complexities and constant changes in tax regulations. Our team of experienced professionals can provide comprehensive consulting and coaching services to help you navigate through the new tax reform.

We will work closely with you to ensure that you are making informed decisions regarding your meals and entertainment expenses. Our expertise in business and consumer services makes us the ideal partner in optimizing your financial strategies.

With our in-depth knowledge and practical insights, we will guide you on how to maximize your deductible business expenses, including meals, while staying compliant with the new tax laws.

Reach Out to Life Designers Today

If you have any questions or concerns regarding meals and entertainment expenses deductions after the tax reform, don't hesitate to contact Life Designers. We are dedicated to providing top-notch consulting and analytical services to business owners like you.

Let us help you navigate the intricacies of the new tax legislation and ensure that you are optimizing your deductible expenses. Trust Life Designers as your partner in success.

Suresh Joshi
Great article! πŸ’ΌπŸ” Very important to understand the impact of tax reform on deductions.
Nov 11, 2023