The recent changes to tax law come with a number of differences in business tax deductions. While these changes don’t apply to your current tax return, it’s important to know about these changes in tax law early on, so that you can make smarter financial decisions for your company. One big change to business deductions for 2018 is the meals and entertainment expense. Keep reading to learn how this type of expense will be deducted on your current return, and how the deduction is different for the current tax year.
If you’re looking to file a business tax return in Provo, contact one of our CPAs for further assistance.
Meals and Entertainment Deductions for 2017
On your current return and in previous tax years, both meals and entertainment for business purposes were considered a valid write-off for businesses. Entertainment could be claimed at 50% of the actual cost, while meals were typically reduced to 50% but could be claimed for up to 100% of the original cost. To qualify as a deduction, the expense had to be related to your business’s growth, such as taking a prospective client or business partner out to dinner.
Meals and Entertainment Deductions for 2018
While the same stipulations apply in order for a meal to qualify as a business deduction, entertainment expenses no longer qualify for any deduction on your business returns. Meals are still a valid deduction, but can only be claimed for 50% of the original cost.
As you make decisions regarding meals and entertainment expenses for your business, it’s important to keep these changes to your business deductions in mind, so that there are no surprises when the next tax season rolls around. For your 2017 tax return, entertainment expenses remain deductible. However, if you have any questions regarding these changes or need assistance to file a business tax return in Provo, please contact us to schedule an appointment with a qualified CPA.