Meals, Entertainment, and Mileage – Oh My!

You’ve no doubt got questions about the effects of the recently passed tax act, and its effects on your business.  Here are a few highlights that will affect the majority of our clients:

Mileage Reimbursement

Beginning 1/1/18, the standard mileage rates for cars, vans, pickups, and panel trucks will be 54.5 cents per mile for business miles, 18 cents per mile for medical or moving purposes, and 14 cents per mile for charitable purposes.

Employee Business Expenses

Effective 1/1/18, unreimbursed employee business expenses are no longer deductible.  Now would be a good time to review your reimbursement policy to be sure it is an accountable plan according to IRS standards.

Meals and Entertainment

The new act imposes stricter limits on the deductibility of meals and entertainment expenses.  Below is a table showing the changes from 2017 to 2018 tax years.

                              

 

2017 Tax Year

2018 Tax Year

 

 

 

Entertaining   Clients

Meals – 50% deductible Meals – 50% deductible
Event tickets, 50% deductible Zero – There is no longer a deduction for entertainment   expenses
Office Holiday   Party

 

100% Deductible 100% Deductible
Employee Travel   Meals

 

50% Deductible 50% Deductible
Meals Provided   for Convenience of Employer 100% Deductible – within certain guidelines 50% Deductible – currently scheduled to become   nondeductible after 2025 without additional legislation

 

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