Vrakas CPAs, Here Are Your Articles for Wednesday, December 15, 2021
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Deductibility of Meals and Entertainment Expenses

 

Tax law changes throughout 2020 and 2021 have impacted the deductibility of certain business meal and entertainment expenses. 

While the treatment should be considered on a case-by-case basis, below is a chart listing general categories and the corresponding treatment for federal and Wisconsin tax purposes.

 

Meals and Entertainment

Expense

2020 Federal

2020 WI

2021-2022 Federal

2021-2022 WI

Entertaining clients (concert tickets, golf, games, etc.)

No longer deductible

50% Deductible

No longer deductible

50% Deductible

Business-related meals (with clients)

50% Deductible

50% Deductible

100% Deductible

50% Deductible

Office snacks, water, and coffee

50% Deductible

50% Deductible

50% Deductible

50% Deductible

Office meals for employees (at a conference, a board meeting)

50% Deductible

50% Deductible

 100% Deductible

50% Deductible

Meals at seminars or conferences

50% Deductible

50% Deductible

100% Deductible

50% Deductible

Dinner provided for employees working late (if takeout or delivery by a restaurant)

50% Deductible

50% Deductible

100% Deductible

50% Deductible

Business meals while traveling

50% Deductible

50% Deductible

100% Deductible

50% Deductible

Snacks and drinks provided free of charge for the public

100% Deductible

100% Deductible

100% Deductible

100% Deductible

Meals included as taxable compensation to employees and included on the W-2

100% Deductible

100% Deductible

100% Deductible

100% Deductible

Events for employees (company-wide party)

100% Deductible

100% Deductible

100% Deductible

100% Deductible

 

 
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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