{"id":5414,"date":"2020-11-19T06:25:48","date_gmt":"2020-11-19T06:25:48","guid":{"rendered":"https:\/\/sarahf14.sg-host.com\/?p=5414"},"modified":"2021-03-24T18:18:56","modified_gmt":"2021-03-24T18:18:56","slug":"finals-regs-reflect-tcja-changes-to-entertainment-and-meal-deduction","status":"publish","type":"post","link":"https:\/\/taxops.com\/finals-regs-reflect-tcja-changes-to-entertainment-and-meal-deduction\/","title":{"rendered":"Final regulations clarify entertainment and meal deductions"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"536\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/taxops.com\/wp-content\/uploads\/2020\/12\/travel-and-entertainment-expenses-1024x536.png\" alt=\"Food buffet, with titling, Final regulations clarify entertainment and meal deductions\" class=\"wp-image-5444 lazyload\" data-srcset=\"https:\/\/taxops.com\/wp-content\/uploads\/2020\/12\/travel-and-entertainment-expenses-1024x536.png 1024w, https:\/\/taxops.com\/wp-content\/uploads\/2020\/12\/travel-and-entertainment-expenses-980x513.png 980w, https:\/\/taxops.com\/wp-content\/uploads\/2020\/12\/travel-and-entertainment-expenses-480x251.png 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1024px, 100vw\" \/><noscript><img decoding=\"async\" width=\"1024\" height=\"536\" src=\"https:\/\/taxops.com\/wp-content\/uploads\/2020\/12\/travel-and-entertainment-expenses-1024x536.png\" alt=\"Food buffet, with titling, Final regulations clarify entertainment and meal deductions\" class=\"wp-image-5444 lazyload\" srcset=\"https:\/\/taxops.com\/wp-content\/uploads\/2020\/12\/travel-and-entertainment-expenses-1024x536.png 1024w, https:\/\/taxops.com\/wp-content\/uploads\/2020\/12\/travel-and-entertainment-expenses-980x513.png 980w, https:\/\/taxops.com\/wp-content\/uploads\/2020\/12\/travel-and-entertainment-expenses-480x251.png 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1024px, 100vw\" \/><\/noscript><\/figure>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>IRS clarifies what can be expensed under current tax law.<\/p><\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">By <a href=\"https:\/\/taxops.com\/team\/davinia-lyon\/\" target=\"_blank\" rel=\"noreferrer noopener\" title=\"Davinia Lyon, partner corporate and international tax\">Davinia Lyon<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The IRS issued final regs implementing significant changes in the Tax Cuts and Jobs Act (TCJA) regarding deductions for travel and entertainment expenses (Sec. 274). The release finalizes proposed TCJA provisions that:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Repeal the tax deduction for entertainment \u201cdirectly related to a trade or business\u201d<\/li><li>Repeal the business-discussion exceptions to the general disallowance of entertainment expense deductions<\/li><li>Repeal special substantiation rules for entertainment expenses<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The regulations confirm that \u201centertainment\u201d does not include food or beverages unless provided at or during an entertainment activity, and their costs are included in entertainment costs. In addition, the rules confirm that deductions related to dues and fees for social, athletic, or sporting club or organizations are not allowed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For food and beverage expenses, taxpayers can deduct 50% of business meal expenses if:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The expense is ordinary and necessary;<\/li><li>The expense is not lavish or extravagant and the taxpayer or an employee is present;<\/li><li>The food or beverage is provided to a current or potential business customer, client, consultant, or similar business contact; and,<\/li><li>Food and beverages provided during or at an entertainment activity purchased separately from the entertainment or their cost is separately stated.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The term \u201cbusiness associate\u201d is expanded to include employees. Employer-provided meals to employees and non-employees is deductible up to 50% of the business meal expense. Food and beverage expenses must include actual cost, including delivery fees, tips, and sales tax; indirect expenses such as transportation to the food and expenses related to operating a facility are not included in the actual cost.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The takeaway<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The applicability of these changes is quite broad and covers all business taxpayers and persons, especially business owners. Taxpayers can deduct 100% of business meal expenses in the following situations, as provided by the IRS:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Consumed by food service workers while working in a restaurant or catering business<\/li><li>Provided by a real estate agent at an open house<\/li><li>Provided by seasonal camp to camp counselors<\/li><li>Provided at company holiday parties and picnics<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Taxpayers can deduct 50% of business meal expenses in the following situations, as provided by the IRS:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Available to employees in a pantry, break room or copy room<\/li><li>Provided to employees at a company cafeteria<\/li><li>Provided to attendees at a business meeting<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">While these may not represent big tax savings ideas for business taxpayers, the final rules do clarify what can be expensed under current tax law. Contact us with your questions on properly classifying expenses to capture full tax savings.<\/p>\n\n\n\n<div style=\"height:62px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/taxops.com\/contact\/\" target=\"_blank\" rel=\"noreferrer noopener\">Get in Touch<\/a><\/div>\n<\/div>\n\n\n\n<div style=\"height:62px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Latest Tax News<\/h3>\n\n\n<ul class=\"wp-block-latest-posts__list wp-block-latest-posts\"><li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/auditor-independence-in-the-age-of-private-equity\/\">Auditor Independence in the Age of Private Equity: What CFOs Need to Know<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/r-d-credits-for-software-companies\/\">R&amp;D Credits for Software Companies: Scrum Teams, Qualifiers, and Section 174 After OBBBA<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/section-174-decoupling-what-tax-pros-need-to-know-state-by-state\/\">Section 174 Decoupling: What Tax Pros Need To Know State By State<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/sean-espy-new-partner\/\">TaxOps Welcomes Sean Espy as Partner, Tax Minimization<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/state-nexus-demystified-navigating-tax-compliance-after-wayfair-episode-1-2\/\">Your Tax Footprint Is Probably Bigger Than You Think: What Finance Leaders Need to Know About State Nexus<\/a><\/li>\n<\/ul>\n\n\n<div style=\"height:62px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<strong>Follow Us<\/strong><br>\n<a href=\"http:\/\/www.linkedin.com\/company\/201050\" target=\"_blank\" rel=\"noopener noreferrer\"><i class=\"fa fa-linkedin-square fa-2x\"><\/i><\/a>\n<a href=\"https:\/\/twitter.com\/taxops\" target=\"_blank\" rel=\"noopener noreferrer\"><i class=\"fa fa-twitter-square fa-2x\"><\/i><\/a> <a href=\"https:\/\/taxops.com\/prospects\/connect-with-us\/\" target=\"_blank\" rel=\"noopener noreferrer\"><i class=\"fa fa-envelope-square fa-2x\"><\/i><\/a>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>IRS clarifies what can be expensed under current tax law. By Davinia Lyon The IRS issued final regs implementing significant changes in the Tax Cuts and Jobs Act (TCJA) regarding deductions for travel and entertainment expenses (Sec. 274). The release finalizes proposed TCJA provisions that: Repeal the tax deduction for entertainment \u201cdirectly related to a [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":5444,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","spt_transcript":"","footnotes":""},"categories":[228,226],"tags":[450,469,507,632],"class_list":["post-5414","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-federal-tax","category-tax-news","tag-entertainment","tag-final-regs","tag-meal-deduction","tag-tcja"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/taxops.com\/wp-content\/uploads\/2020\/12\/travel-and-entertainment-expenses.png","_links":{"self":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts\/5414","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/comments?post=5414"}],"version-history":[{"count":2,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts\/5414\/revisions"}],"predecessor-version":[{"id":7651,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts\/5414\/revisions\/7651"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/media\/5444"}],"wp:attachment":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/media?parent=5414"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/categories?post=5414"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/tags?post=5414"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}