Deductions for Meals & Entertainment – Did You Know?

The Tax Cuts and Jobs Act (TCJA) of 2017 changed the rules for deducting meal and entertainment expenses on business tax forms. For the most part, the 50% deduction for meals directly connected to the conduct of your business remains intact, as long as the expense is not extravagant. However, the deduction for entertainment expenses has been eliminated, with only a few very specific and rare exceptions.

Applying the new law can get complicated, because entertainment activities such as attending a basketball game often include the purchase of food. To find out if your meals associated with an entertainment event still qualify for the 50% deduction, you may need to consult a tax advisor with extensive knowledge of business tax rules. Most importantly, the TCJA expressly forbids reporting entertainment expenses under another expense category (such as advertising) in order to claim a deduction.