IRS Issues Transitional Guidance on Business Expense Deduction for Meals and Entertainment
IRS issued transitional guidance today on the changes the Tax Cuts and Jobs Act (TCJA) made to the business expense deduction for meals and entertainment. Last December, TCJA eliminated the deduction for any expenses related to activities generally considered entertainment, amusement or recreation. Taxpayers may continue to deduct 50 percent of the cost of business meals if the taxpayer, or employee of the taxpayer, is present, and the food or beverages are not considered lavish or extravagant. Meals may be provided to a current or potential business customer, client, consultant, or similar business contact. Additionally, food and beverages provided during entertainment events will not be considered entertainment if purchased separately from the event.