A pending IRS ruling may ease concerns about deductions for business meals.
According to the Wall Street Journal, the IRS is expected to release guidance that deductions for 50 percent of the cost of taking clients out for business meals. There had been concern about the deductions going away as a result of the massive tax overhaul passed last year.
According to the Journal:
The IRS’s guidance is expected to take a tack that generally preserves the 50% deduction for the cost of meals with clients, according to the people familiar. It’s also expected to offer details on how the 50% meal write-off meshes with the new denial of entertainment deductions.
For example, if a business owner takes a client to a ballgame, the cost of the tickets isn’t deductible because the expense is for entertainment. If the owner buys hot dogs and drinks for himself and the client at the game, this expense could still be 50% deductible, the IRS is expected to say.
The cost of the meal would also be deductible if it’s part of the ticket price but is detailed separately from the cost of watching the game. If the food cost is part of the ticket price and not broken out separately, then it wouldn’t be deductible.
The meals and entertainment deduction rules are just part of the changes businesses must take into account as a result of the tax overhaul. Sterling Accounting can help you navigate those changes.
With over 15 years of experience, Sterling Tax & Accounting Services located in Wilton Manors, Florida, can take the following off of your hands: Accounts Receivable, Accounts Payable, Accounts Reconciliation, QuickBooks® Set Up and Training, Small Business Payroll, Processing Small Business Quarterly Tax Reporting, Annual Government Filing, & Financial Statements. Sterling Tax & Accounting Services provides bookkeeping services to help you with your small business accounting using QuickBooks® business accounting software. We offer everything from basic bookkeeping to bookkeeping courses for those small business owners who want to take care of their bookkeeping themselves. We also offer notary services for small businesses.