28 THE QUEENS COURIER • MAY 9, 2019 FOR BREAKING NEWS VISIT WWW.QNS.COM
TAX TIPS
IRS CLARIFIES
DEDUCTIBILITY
OF BUSINESS MEALS
BY JOHN SAVIGNANO, CPA
The IRS issued guidance clarifying that
taxpayers may generally continue to deduct
50% of the food and beverage expenses
associated with operating their trade or
business, despite changes to the meal and
entertainment expense deduction under Sec.
274 made by the law known as the Tax Cuts
and Jobs Act.
According to the IRS, the amendments
specifically deny deductions for expenses for
entertainment, amusement, or recreation, but
do not address the deductibility of expenses for
business meals. This omission has created
much confusion in the business community,
which the IRS addressed in this interim
guidance.
Sec. 274(k), does not allow a deduction for the
expense of any food or beverages unless (1) the
expense is not lavish or extravagant under the
circumstances, and (2) the taxpayer (or an
employee of the taxpayer) is present when the
food or beverages are furnished. This generally
provides that the amount allowable as a
deduction for any expense for food or
beverages cannot exceed 50% of the amount of
the expense that otherwise would be allowable.
The IRS will not allow the entertainment
disallowance rule to be circumvented through
inflating the amount charged for food and
beverages.
John Savignano is a partner with Savignano
Accountants & Advisors located at 47-46
Vernon Blvd., Second Floor, in Long Island City.
If you have any questions or require additional
information, please call John at 718-707-0955.
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