The Tax Cuts and Jobs Act: Business Expense Update


        One of the more surprising aspects of the Tax Cuts and Jobs Act was the removal of tax deductions for meals and entertainment. It basically eliminated any deductions related to expenses from recreational activities with clients or prospective clients. This concerned a great number of people.

Aside from the businesses who made use of this opportunity to reduce their tax liability, there were other businesses that provided the entertainment, amusement, and recreation. For example, sports teams that sell luxury boxes for their games were unsure if they were going to see a steep decline in sales. This is a source of revenue that the teams keep, and do not share with their leagues. However, after a few months, the IRS has issued some guidance on this issue. Taxpayers can continue to deduct 50% of the cost of meals, if they are not considered lavish. In the last 2 months of the year, we can expect a great deal of regulations and clarifications to be released. These refinements will help us to understand the impact and scope of the Tax Cuts and Jobs Act.

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