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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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.
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.