Cornbelt Financial
  • Home
  • About
    • Our Team
    • Who We Serve
    • Values
  • Services
    • Tax Preparation & Planning
    • Bookkeeping, Payroll, & Consulting
    • Financial Planning
    • Investment Advising
    • Succession Planning
    • Business Valuation
  • Blog
  • FAQ
  • Login
  • Contact
  • Home
  • About
    • Our Team
    • Who We Serve
    • Values
  • Services
    • Tax Preparation & Planning
    • Bookkeeping, Payroll, & Consulting
    • Financial Planning
    • Investment Advising
    • Succession Planning
    • Business Valuation
  • Blog
  • FAQ
  • Login
  • Contact

Meals, entertainment and transportation may cost businesses more under the TCJA

1/27/2018

0 Comments

 
Picture
Meals, entertainment and transportation may cost businesses more under the TCJAAlong with tax rate reductions and a new deduction for pass-through qualified business income, the new tax law brings the reduction or elimination of tax deductions for certain business expenses. Two expense areas where the Tax Cuts and Jobs Act (TCJA) changes the rules — and not to businesses’ benefit — are meals/entertainment and transportation. In effect, the reduced tax benefits will mean these expenses are more costly to a business’s bottom line.

Meals and entertainment

Prior to the TCJA, taxpayers generally could deduct 50% of expenses for business-related meals and entertainment. Meals provided to an employee for the convenience of the employer on the employer’s business premises were 100% deductible by the employer and tax-free to the recipient employee.

Under the new law, for amounts paid or incurred after December 31, 2017, deductions for business-related entertainment expenses are disallowed.

Meal expenses incurred while traveling on business are still 50% deductible, but the 50% limit now also applies to meals provided via an on-premises cafeteria or otherwise on the employer’s premises for the convenience of the employer. After 2025, the cost of meals provided through an on-premises cafeteria or otherwise on the employer’s premises will no longer be deductible.

Transportation

The TCJA disallows employer deductions for the cost of providing commuting transportation to an employee (such as hiring a car service), unless the transportation is necessary for the employee’s safety.

The new law also eliminates employer deductions for the cost of providing qualified employee transportation fringe benefits. Examples include parking allowances, mass transit passes and van pooling. These benefits are, however, still tax-free to recipient employees.

Transportation expenses for employee work-related travel away from home are still deductible (and tax-free to the employee), as long as they otherwise qualify for such tax treatment. (Note that, for 2018 through 2025, employees can’t deduct unreimbursed employee business expenses, such as travel expenses, as a miscellaneous itemized deduction.)

Assessing the impact

The TCJA’s changes to deductions for meals, entertainment and transportation expenses may affect your business’s budget. Depending on how much you typically spend on such expenses, you may want to consider changing some of your policies and/or benefits offerings in these areas. We’d be pleased to help you assess the impact on your business.

​© 2018
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Author

    Adam Carr, MBA, EA

    Archives

    November 2024
    October 2024
    June 2024
    March 2024
    February 2024
    January 2024
    December 2023
    November 2023
    July 2023
    June 2023
    May 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    February 2016
    January 2016
    December 2015
    November 2015

    Categories

    All
    Business
    Charity
    Education
    Estate Planning
    Identity Protection
    Investments
    Life Events
    Medical
    Real Estate
    Tax Forms
    Tax Law
    Tax Planning
    Tax Reform

    RSS Feed

Client Login
Xero Partner
Gusto Partner
© COPYRIGHT Cornbelt Financial, LLC 2024. ALL RIGHTS RESERVED. | Privacy Policy

There are no warranties implied.
Cornbelt Financial, LLC (“RIA Firm”) is a registered investment advisor located in Denver, Colorado. Cornbelt Financial, LLC may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. Cornbelt Financial, LLC’s website is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of Cornbelt Financial, LLC’s website on the internet should not be construed by any consumer and/or prospective client as Cornbelt FInancial, LLC’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the internet. Any subsequent, direct communication by Cornbelt Financial, LLC with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of Cornbelt Financial, LLC, please contact the state securities regulators for those states in which Cornbelt Financial, LLC maintains a registration filing. A copy of Cornbelt Financial, LLC’s current written disclosure statement discussing Cornbelt Financial, LLC’s business operations, services, and fees is available at the SEC’s investment adviser public information website – www.adviserinfo.sec.gov or from Cornbelt Financial, LLC upon written request. Cornbelt Financial, LLC does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Cornbelt Financial, LLC’s website or incorporated herein, and takes no responsibility therefor. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
This website and information are provided for guidance and information purposes only.  Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy.  This website and information are not intended to provide investment, tax, or legal advice.
Insurance products and services are offered and sold through individually licensed and appointed insurance agents.