Surgent's Food, Beverage, and Entertainment Expensing

Overview

The IRS has recently issued final regulations regarding the TCJA’s elimination of the deduction for expenditures related to entertainment, amusement, or recreational activities and provided guidance to determine whether an activity is considered to be entertainment. The final regulations also addressed the 50% limitation on the deduction of food and beverage expenses and when the 50% limitation does not apply. Due to the pandemic, Congress changed the rules for 2021 and 2022 to allow for 100% deductibility for meals. To effectively advise clients, it is imperative for tax practitioners to understand these rules and be updated on the latest guidance.

Highlights

• Special rules for 2021 and 2022 allow 100% deductibility for meals
• IRS rules relating to the nondeductibility of activities considered entertainment or amusement
• What constitutes entertainment for tax purposes?
• When are meals deductible and at what rate once the special rules applicable to 2021 and 2022 no longer apply
• When employers may deduct food and beverages provided to employees
• Special rules for per diem meal payments for 2021 and 2022

Prerequisites

A basic understanding of the tax rules relating to individual income tax

Designed For

Tax practitioners who anticipate advising clients with respect to employer meals and entertainment expenditures

Objectives

• Understand the new rules relating to the deductibility of expenses associated with meals, entertainment, and food and beverages that employers provide to employees

Preparation

None