Entertainment

Your 2023 Guide To Entertainment And Meal Deductions

×

Your 2023 Guide To Entertainment And Meal Deductions

Share this article
Your 2023 Guide To Entertainment And Meal Deductions

Tax planning is essential to owning and running a successful business. The meals and entertainment tax deduction has been a valuable way for many small business owners to reduce their tax liability each year. Unfortunately, the 2023 meal deduction rates will be cut in half from the 2022 deduction rate.

Read on as we share our dining and entertainment deals for 2023. This information can help you take advantage of this valuable tax credit that will save you money. Some of you reading this are giving up your office space and are holding a lot of meetings in restaurants.

The amount of food and entertainment tax has changed in recent years. With the passage of the Tax Cuts and Jobs Act of 2018 (TCJA), also known as the Trump Tax Plan, you cannot deduct entertainment expenses. Whether you want to entertain sporting events or take your clients to Broadway shows, there's no extra charge for tickets.

There are other ways to deduct some of the expenses that qualify for the Meals and Entertainment Tax Credit.

2023 discounts on dining and entertainment

It would make more sense to discuss what else can be deducted from the food and entertainment tax credit in 2023. Here are some possible tax deductions, which can be half or full.

· Business lunch with clients (50%)

Office food (50%)

Eat at work (50%)

Dinner at the Congress (50%)

Catering for company parties (100%)

Offer food and drink to the community (100%)

Overtime dinner at the office (100% )

Your guide to cutting back on food in 2023

By 2023, most business meals are only 50% deductible under IRS rules. Let's say you're taking your favorite client out to a nice dinner (to discuss business); The price of food can be halved. On the other hand, if you go out to eat with a client without business, the meal is not deductible.

See also  How to find hidden iPhone apps

Adding to the confusion is the fact that 100 percent of food has been cut in 2021 and 2022. This was a temporary change to increase costs in restaurants during the COVID pandemic.

MORE California Tax Planning from FORBES . How to Avoid Taxes

How to document your food tax credit

Let's say you want to cut down on business lunches that cost more than $75; Receipts or receipts for maintenance charges should be kept. For meals under $75, the IRS does not have specific requirements for documenting the cost of withholding the receipt. In any case, you may want to record your deductible meal with the following information: date of meal, total amount including tax and tip, name of restaurant, details of business meal (who went and how. This is up to your business).

Your Guide to Slimming Fun!

We mentioned that most entertainment expenses are no longer deductible.

Some of the most common exclusions that may still be tax-deductible in 2023 include expenses related to events such as company parties or gift trips, expenses related to business meetings, brainstorming sessions, professional associations, and even conferences. Also, if you sell entertainment to customers, there is an exception for entertainment deductions. For example, if a bar owner pays a band to perform for customers, it is likely to be a deductible business expense.

MORE FORBES IRS Announces New Tax Classes and Standard Deductions for 2023 By

How to make up for missed meals in 2023

Make sure you have the right retirement plan for your small business. Try to increase your contributions to your 401(k) plan. If you need a more valuable tax deduction, consider setting up a cash-based retirement plan.

See also  South Koreas Entertainment Wave Grows With $2.5bn Netflix Investment

How to invest in stocks for beginners in 2023

Leave a Reply

Your email address will not be published. Required fields are marked *