Yes, Virginia, there is cause to celebrate! Your office holiday party is 100% deductible according to the regulations outlined in the 2017 Tax Cuts and Jobs Act (TJCA). Also included in the 100% deduction list include transportation to and from a restaurant for a client business meal, food offered to the public for free at things like hosted seminars and also meals included as taxable compensation to an employee or independent contractor.
There are changes coming to other meal and entertainment deductions due to TCJA that do need to be heeded, however. Several expenses that were 100% deductible under the old rules are now at 50% under TCJA. For example, business meals provided for the convenience of employer are now only 50% deductible, and barring further action by Congress, those meals will be nondeductible after 2025.
“It is important for businesses and individuals to code their expenses appropriately so when it comes time to claim their deductions, we can accurately account for these expenditures,” said Tax Partner Adam Goehring, “The changes to tax codes as a result of the tax reform act are monumental. I would advise people to start discussions with their tax advisor as soon as they are able.”
Not sure where to start? Download this comprehensive Meal and Entertainment Changes chart to see what is changing and what expense deductions are staying the same. Our tax experts are on hand to help! Start here.