Changes to the Entertainment Expense

The Tax Cuts and Jobs Act permanently repealed most business deductions related to entertainment, amusement or recreation activities or a facility used in connection with any of the aforementioned activities. Membership and club dues remain non-deductible.

The above changes apply to amounts paid or incurred after December 31, 2017.

While the Act provided substantial changes to entertainment and employer transportation benefits, the deduction for 50% of food and beverage expenses associated with operating a trade or business is retained (meals consumed by employee while traveling for work). Additionally, the Act reduces the limit to 50% ( down from 100%) for the employer expenses associated with providing food and beverages to employees through an eating facility, which meets de minimis fringe requirements. Meals provided on-premises to employees for the convenience of the employer to employees, spouses and dependents remain 50% deductible until December 31, 2025, after which they become nondeductible.

Taxpayers subject to the Department of Transportation hours of service limits, such as interstate truck operators and bus drivers, are still allowed to deduct 80% of business meals consumed, or related to, any period of duty for which those limits are in effect. 

Please visit the Our Thoughts On...Transportation and Logistics blog for more articles, or contact a Schneider Downs tax advisor if you have any questions.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2023 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
Automobile, Tax BY Brett Cubellis
Explaining the Transfer/Advance Payment of Clean Energy Credits and Energy Credits Online Registration
New Research and Development Capitalization Requirement Shuffles System
Contractors May Benefit From SALT Cap Workaround
2023 Legislative & Regulatory Update
Tax BY Kirk Mitchell
Can “Moore” Tax be Refunded from IRS? How to Protect Your Potential Claim for Refund of §965 Foreign Corporation Transition Tax
Fraud, Tax BY Charlotte Garraway
5 Red Flags of Fraudulent ERC Providers
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us
Pittsburgh

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.

×