In a new case, a business owner was only able to salvage part of the deduction he claimed for business meals. For example, the Tax Court denied the any write-off for expenses that appeared to be purely personal nature, such as cups of coffee he ordered just for himself (Lombardi, TC Memo 2017-4, 1/4/17).
Generally, you may deduct the cost of business meals when you travel away from home on business or you entertain business clients immediately preceding or following a substantial business deduction. The deduction is limited to 50 percent of the cost. Therefore, if you wrap up a major business deal and treat the client to dinner and drinks costing $1,000 afterwards, including amounts attributable to significant others, you can deduct $500.
But the IRS won’t simply accept your word for it. For entertainment expenses, you must keep records indicating the following:
Unfortunately for the taxpayer in the new case, he failed to deliver the tax goods.
Make sure to consult with your tax advisor for your particular situation .
Now that the Tax Cuts and Jobs Act (TCJA) of 2017 is on the books, people saving for retirement and people who are already retired (that's everybody, really) should consider how the new law will affect their financial planning.
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