January 08, 2019
As you prepare for year-end, make sure to consider the impact of the Tax Cuts and Jobs Act. The most significant change in tax legislation in over 30 years, the act has drastically affected several key items in year-end planning.
One key item to pay attention to is the change in the deductibility of entertainment, meals and transportation fringe benefits in 2018 and beyond.
Here’s an overview of what you need to know:
What really changed
The new tax reform law eliminated the deduction for entertainment, amusement or recreation expenses, membership dues for clubs and related facility expenses.
This could wreak serious havoc on your bookkeeping. Make sure, as you start planning for year-end, that you review your procedures to capture expenses treated differently in 2018 and beyond. Consider whether some expenditures for events may more appropriately be classified as promotions or advertising. You may also want to review your reimbursement policies to ensure they align with the new rules.