Let’s continue our tax reform bill update. Many changes were made that affect individuals and businesses. I won’t cover them all but am trying to hit the highlights and what is probably applicable to most people.
Last month we discussed charitable contributions. This month we’ll discuss another thing I love- meals and entertainment! However, entertainment is no longer deductible. Nope, not at all. This is a big change. Meal expenses are still limited to 50% but anything considered entertainment, amusement, or recreation is not. The big CPA firms are recommending bookkeepers create separate general ledger accounts for non-deductible entertainment expenses.
Other changes under the M&E umbrella include the removal of the deduction for dues paid to any club formed for the principle purpose of entertainment (social clubs, hunt clubs, country clubs). Dues payments that are still deductible moving forward in 2018 include the following: business leagues, trade associations, chambers of commerce, boards of trade, real estate boards, professional organization, and civic or public service organizations. The bill also no longer allows deductions for transportation fringe benefits or expenses incurred to provide transportation for employees’ commuting purposes.
Meals and entertainment affect every business I know, especially with all the great restaurants in Charleston. Be sure you understand these new rules!
Jordan Ilderton, CPA