During tax season the most common question asked was about the tax reform. How will it affect my 2018 tax return? Which expenses are still allowed? How can I plan to protect my self from owing a lot of money next year. Over the next number of months we will be going through certain changes made to the tax law.
Change #2 – Business entertainment expenses:
OLD LAW:
Under the old law, business meals and entertainment expenses were 50% deductible. Entertainment expenses included any item with respect to an activity which is of a type generally considered to constitute entertainment, amusement, or recreation, or with respect to a facility used in connection with such activity. In other words, certain business activities business owners/companies would use to try to close a deal with a potential new client. Those activities could include sporting games, golfing, and in some cases night club entertainment. As long as business is being conducted during those events.
NEW LAW:
Under the new law, the meals portion is still 50% deductible. However the entertainment portion has been eliminated and is no longer tax deductible. It is very important that you properly categorize meals from entertainment expenses to avoid lost tax savings.
You should seek advice from your tax professional when trying to determine how these changes will affect you.
If you have any further questions or would like talk to us about your tax and/or accounting/bookkeeping situation, call us for free consultation at (240) 676 – 0188 or email us at info@triuneaccountinggroup.com. At Triune Accounting Group it is our business to focus on your business, so you can focus on your business.