The IRS is giving businesses back a break they thought they had lost due to the Tax Cuts and Jobs Act. The agency announced that companies can still deduct 50% of meals while entertaining clients and customers. The announcement cleared up confusion about whether the tax law changes had completely eliminated the benefit of writing off taking clients out to a meal.
The Tax Cuts and Jobs Act, eliminated the deduction for so-called entertainment expenses including golf outings, cruises and concert tickets. Most people believed this would include food purchased while taking clients out and about. The IRS has announced that the costs of those business meals are still deductible as long as they are on a separate receipt. This means buying a meal after playing golf or seeing a movie and then buying a meal after can be deducted. But if you buy a ticket to a sporting event that includes food and drink, that would not be eligible for the tax break.
This announcement comes after different agencies and organizations asked for the IRS to clear up the uncertainty. The IRS issued the preliminary guidance last week and said more formal regulations would be available in the future.
Additional Readings
As a business owner, you know everything there is to know about your industry. You could be an expert on your specific business, but how much do you know about business taxes? If you are like other business owners, you might not know a lot. Luckily, there are professionals who can guide you through the basic and specific tax...
If your loved one recently passed away, you may have many questions about filing income tax for them. Perhaps the most important thing is to understand that you are not alone. Dealing with a deceased’s unpaid taxes can be challenging. For example, who is responsible for paying taxes when someone dies? Do IRS debts go...
If you have a tax balance with the IRS, you may be wondering if you can get a passport. While having your passport renewal denied or revoked is a possibility, it depends on the amount you owe the IRS. If your taxes become seriously delinquent, the IRS can take action against you, leading to the...
Most employers in the United States completely shut down or suspended operations during the COVID-19 pandemic. To help such businesses, the federal government implemented various policies, including the Employee Retention Tax Credit (ERTC) or Employee Retention Credit (ERC) program. However, it can take the IRS months to process claims because of the number of applications the...
If you’re a small business owner, you’ve probably heard about sales tax. Knowing how to collect, record and remit sales tax can be complicated, especially as your business grows. Keeping up with changing tax regulations can also be challenging. Paying sales tax for your small business is essential because failing to do so can result...
The Employee Retention Credit (ERC), also known as the Employee Retention Tax Credit (ERTC), will unveil some major changes at the start of 2024. Starting in September of 2023, the IRS Commissioner placed a moratorium on new ERC applications through the end of the year, giving the IRS time to update its guidelines and develop a new...