The business deduction for meals & entertainment expenses has been changed.

Congress has historically been skeptical that businesses claim expenses for activities that are unrelated to their essential functions.  As a result, entertainment expenses are no longer deductible but meal expenses still should be.

Since the meals & entertainment deduction has been tightened, meal expenses incurred at entertainment events should be separately charged so that you may substantiate the 50% deductibility.  It is recommended that you create new chart of accounts to separately track entertainment expenses (non-deductible) and meals that may qualify as (100% deductible or be limited to 50% deductible.

For more information on this topic, read “Determining deductibility of meals after the TCJA” by Mark G. Cook, CPA, CGMA.  AICPA.org.  The Tax Advisor.