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Focus on Taxation: Meals & Entertainment Final Regulations Clarify Deductibility

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The IRS and Treasury have finalized regulations implementing amendments made by the Tax Cuts and Jobs Act (TCJA) to business related meals and entertainment deductions.
October 15, 2020

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The IRS and Treasury have finalized regulations implementing amendments made by the Tax Cuts and Jobs Act (TCJA) to business related meals and entertainment deductions. The TCJA largely eliminated the deduction for entertainment expenses paid or incurred after December 31, 2017, but left intact certain exceptions. Notable changes were made to food and beverage expenses as well; however, the final regulations confirm that in general 50 percent deductions for business meals remain.

The final regulations largely follow proposed regulations issued in February of 2020 and Notice 2018-76, with a few modifications in response to comments. Guidance provided distinguishes entertainment from meals, reinforces exceptions that continue to allow a full deduction, and clarifies business meal deductibility.

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