Dining And Wining

There Have Been Many Discussions

About entertainment and meals deductions under the Tax Cuts and Jobs Act. The answer is different for each. A reference that you might check is IRS Notice 2018-76.  Put that in your browser and you have your answers.

My understanding is that deductions for entertainment, amusement, or recreation are kaput, gone, dead, history, etc. However, remember that I am only an educator and cannot be quoted.  But if anybody questions that, direct them to the above notice and/or Section 274 of the infamous Internal Revenue Code.

On Business Meals:

In the Notice the IRS seems to say, “These regulations were not changed”, and where is everyone hearing that?  They say, “Same Old, Same Old”. And they give interim guidance for business meals which is much better than no guidance at all. They said that they will get around to amending Section 274 soon.

The Notice States Taxpayers May Deduct 50 Percent Of Another Allowable Business Meal If:

1. The expense is an ordinary and necessary expense under § 162(a) paid or
   incurred during the taxable year in carrying on any trade or business;
2. The expense is not lavish or extravagant under the circumstances;
3. The taxpayer, or an employee of the taxpayer, is present at the furnishing of
   the food or beverages;
4. The food and beverages are provided to a current or potential business
   customer, client, consultant, or similar business contact; and
5. In the case of food and beverages provided during or at an entertainment
   activity, the food and beverages are purchased separately from the
   entertainment, or the cost of the food and beverages is stated separately from
   the cost of the entertainment on one or more bills, invoices, or receipts. The
   entertainment disallowance rule may not be circumvented through inflating
   the amount charged for food and beverages.