Meals Operations Manual

July 30, 2019

Let’s talk about meals and entertainment expenses. First off, there have been some law changes effective in 2018. Meals expenses are still 50% deductible as they have been in the past. So whether it’s Morton’s or McDonald’s, you’ll get a 50% deduction on meals.

There is 0%, no deduction for entertainment expenses beginning in 2018. Now to qualify for a meal expense, it must be a bonafide business discussion. That means that it’s with a client, a prospect or referral source, a business colleague, you must be dealing in business while eating.

So the meals, you must document your meals further than you do most other expenses to get the deduction. If you pick up the receipt from the restaurant, you’re going to have three of the five elements typically on that receipt. How much, when, the date, where you were, the restaurant name, the business purpose, and the business relationship must be honored.

So indicate who you were with and what you discussed. Now you don’t have to write an essay, but you do have to have proper details, so you can’t just write business. So, a good example might be, if I met with a colleague to discuss the new tax law, I met with a prospect to discuss their operations and expansion of their business.

Those types of things are deductible as meals. Remember still at 50% deduction, meals, and entertainment used to have a 100% deductible meals expense if you were bringing in food for employer’s convenience. That is no longer allowed after 2018 and all meals are still at a 50% deduction.

Entertainment is no longer deducted after 2018. So things like sporting events, entertainment like golf or hunting going out and buying tickets to things are no longer allowed. Okay, so you’ll get a 0% deduction on those. So the key, try to convert those into more meals type expenses to manage your deductions.

Also, there’s no law change on this, but still, country club dues are not deductible. If you do go to a country club and you have a meal there, you can still deduct the cost of the meal, but the cost of the dues or playing golf or things like that are no longer deductible.

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Creativity and CPAs don’t generally go together.  Most people think of CPAs as nerdy accountants who can’t talk with people.  Well, it’s time to break that stereotype.  Lively, friendly, and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna and Chad Bordeaux.  They have over 50 years of combined experience as entrepreneurial CPAs.  They’ve owned businesses and helped business owners exceed their wildest dreams.   They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.