Helicopter View of Meals and Entertainment (2021-2022)
I thought I’d share some good news as it seemingly “feels” like we might be seeing some improvements of our current COVID-19 protocols that would allow us to venture toward our more “normal” business activities that will now be more conducive to connecting with our Customers again.
When you know the rules, Business Entertainment and “Employee Entertainment” costs are allowed to be tax-deductible.
The IRS says that the following types of entertainment qualify for the 100 percent employee entertainment tax deduction.
To help you get ready, check the table below for what you can do in 2021 and 2022 as the law stands now:
|Amount Deductible for Tax Years 2021-2022|
|Restaurant meals with clients and prospects|
|Entertainment such as baseball and football games with clients and prospects|
|Employee meals for convenience of employer, served by in-house cafeteria|
|Employee meals for required business meeting, purchased from a restaurant|
|Meal served at chamber of commerce meeting held in a hotel meeting room|
|Meal consumed in a fancy restaurant while in overnight business travel status|
|Meals cooked by you in your hotel room kitchen while traveling away from home overnight|
|Year-end party for employees and spouses|
|Golf outing for employees and spouses|
|Year-end party for customers classified as entertainment|
|Meals made on premises for general public at marketing presentation|
|Team-building recreational event for all employees|
|Golf, Theater, or Football Game with your best customer|
|Meal with a prospective customer at the country club following your non-deductible round of golf|
The table above gives you a usable “Helicopter View” of how the rules set various business meals and entertainment tax deductions for 2021 and 2022.
The opportunities for employee entertainment are excellent. If you want to retain more of what you make and multiply your net worth while remaining tax compliant, contact us at Morris + D’Angelo. This is our Expertise!
Parts of this article are published with permission from Bradford Tax Institute, © 2021 Daniel Morris, Morris + D’Angelo
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