No longer are businesses allowed to deduct the cost of business-related entertainment (e.g. taking a client to a sporting event or the theatre). Meals an employer provides on the employer’s premises as a convenience to the employer that were once 100% deductible are now only 50% deductible (and will eventually become entirely non-deductible). Business meals are still deductible at 50%, but there is ambiguity regarding whether certain situations constitute “business meals” (50% deductible) versus “entertainment” (entirely non-deductible). IRS guidance will be needed to clarify those issues. An outline of the changes for 2018 and beyond is provided below.
To determine how these changes may affect your situation please consult with your Williams-Keepers advisor.