Author: David Ellison
The Tax Cut and Jobs Act (TCJA) changed the deductibility of Meals and Entertainment. Prior to TCJA, business meals and entertainment were typically 50% deductible. The TCJA changed that by eliminating the tax deduction for entertainment. So where does this leave business meals?
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Nothing has changed for the traditional business meals with customers or prospective customers or meals incurred while traveling. These are still 50% deductible. What has changed are meals as part of entertainment. If the meals are included as part of the entertainment, for example, a fee for a luxury suite at a sporting event, the entire fee is non-deductible entertainment. However, if the cost of the food and beverages is separately stated, or is a completely separate charge, then the cost of the food and beverages is 50% deductible and the cost of the entertainment is non-deductible.
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