Do you do any entertaining of business clients and contacts?
Do you provide meals to staff at the office?
The new tax law may affect how you do business in these areas. Previous law had an exception to the 50% deductible meal, and that was if a business provided meals to employees at the office or place of business for their benefit, it was 100% deductible. That exception is no longer as of now: all meals are subject to the 50% exclusion. Another significant law change in this area relates to entertainment. This could be things such as tickets to a ballgame or the theatre or greens fees at the golf course. Entertainment expenses are no longer deductible starting in 2018. Consider the amount of money you spend generating or sustaining business via entertainment. What was 100% tax deductible is now 0% tax deductible.
From a bookkeeping perspective, consider tracking travel, meals and entertainment separately. How we account for certain expenditures in 2018 (business promotion vs. education vs. entertainment) and how we segregate those costs might help to mitigate the tax effect of the change in the law.
Frank J. Pedicini, CPA