The new tax law changes the way you should be accounting for meals and entertainment
Through the end of 2017, both entertainment and most meal expenses were 50 percent deductible. Because of the similar tax treatment, most businesses recorded meals and entertainment in a single account.
But as of January 1, entertainment expenses are no longer deductible. To aid in income tax preparation, you should now be recording entertainment expenses and meal expenses in separate accounts. If an entertainment activity includes meals, the cost of the meals still qualifies for 50 percent deductibility.
Making the change to separate accounts, now, will help you avoid year-end headaches when information is less readily available.
Please contact us with any questions.