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New 2018. How to record meals transactions?

I 've been notified that there's changes in the meals/entertainment deductions for 2018. I always buy lunch for my subcontractors when our work hrs coordinate. They are not official employees, but I do see myself inviting someone for  lunch at least 3 times a week.Mostly to discuss progress on the projects that we have going on.( currently working as a construction contractor ) How do I record that on my meals account .? Should I just record my meal expense to the proper category to claim deduction and what I spended inviting the other person , record as a owner draw? 

Example : if I go to a restaurant and the total is $25. My share was $12.99 and the rest was from the subcontractor. How should i record the rest? Or have I misunderstood the new deduction guidelines?

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Best answer 12-10-2018

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ProAdvisor

See below for explanation of new rules. http://www.hertzb...

6 Comments
ProAdvisor

See below for explanation of new rules. http://www.hertzb...

ProAdvisor

Even though it might not be deductible for federal taxes,...

 Even though it might not be deductible for federal taxes, it may be deductible for your state tax return.

Just record it & let your accountant figure it out.

Established Community Backer ***

Record the Entire amount; let the tax prepare adjust it a...

Record the Entire amount; let the tax prepare adjust it at the time they use the values. If you also adjust it, you risk they Also adjust it, later.

The new change is to separate meals and entertainment.

Make separate Expense accounts, such as Business meals (to use with subs) and make one Other Expense type account for Entertainment as NonReportable, separately, now. Or, put that as Draw from equity = you are deemed to have paid for something personal, even if you took business funds to do so.

Established Community Backer ***

Non deductible leads to not incurred since it becomes an...

Non deductible leads to not incurred since it becomes an invalid business expense leads to overall reduction in business spending leads to higher unemployment and businesses going out of business.
Established Community Backer ***

What does this mean: "Non deductible leads to not incurre...

What does this mean: "Non deductible leads to not incurred"?

You post it for clarity and it is used per the tax regulations that apply.

Thank you to Ray for posting that nice reference table. There are going to be Lots of little changes like this that affect how we track entries for 2018.
Established Community Backer ***

What I mean is that when big (and little) business discov...

What I mean is that when big (and little) business discovers it cannot deduct expenses for ANY entertainment of non employees , as the charts indicate, then things will happen. Management will think long and hard about renewing any entertainment expenses they get 50% reduction for now.

In 2017 big company A spends $100,000 on meals and entertainment eligible for 50% treatment. At 35% fed corp tax rate to spend this $100,000 costs an additional $17,500 in tax. In 2018 with 0 deduction the same $100,000 will cost $21,000 at new rates. Someone like GM, WalMart, even Intuit itself probably spends much much more. But can they increase their entertainment budget by 3.5% to stay on par or will they reduce spending by 3%? <a rel="nofollow" target="_blank" href="https://dgmcpa.com/meals-entertainment-transportation-may-cost-businesses-tcja/">https://dgmcpa.com/...>