Axley & Rode, LLP

The IRS has released proposed regulations that address the elimination of the deduction related to entertainment, amusement or recreation activities. The Tax Cuts and Jobs Act (TCJA) revised the rules for deducting expenditures for meals and entertainment, effective for amounts paid or incurred after Dec. 31, 2017. The TCJA also repealed the directly related and business discussion exceptions to the prohibition on deducting entertainment expenditures. The proposed regs provide guidance on how to apply the TCJA changes and determine whether an activity is considered to be entertainment. They also address the limitation on the deduction of food and beverage expenses. Contact us for details.

Meal, vehicle and travel expenses are common deductions for businesses. But if you don’t properly document these expenses, you could find your deductions denied by the IRS. A critical requirement Subject to various rules and limits, business meal (generally 50%), vehicle and travel expenses may be deductible, whether you pay for the expenses directly or reimburse employees for them. Deductibility depends on a variety of factors, but generally the expenses must be “ordinary and necessary” and directly related to the business. Proper documentation, however, is one of the most critical requirements. And all too often, when the IRS scrutinizes these deductions, taxpayers don’t have the necessary documentation. What you need to do Following some simple steps can help ensure you have documentation that will pass muster with the IRS: Keep receipts or similar documentation. You generally must have receipts, canceled checks or bills that show amounts and dates of business expenses. If you’re de...