Meals and Entertainment - The Tax Cuts and Jobs Act has made significant changes to the deductibility of business meals and entertainment starting in 2018. Entertainment expenses are no longer a deductible business expense. Business meals, not related to entertainment, are 50 percent deductible.
Year-end parties for employees, marketing presentations, and COGS food expenses are still 100% deductible. It’s important to update one’s chart of accounts to ensure proper classification.The cost of business gifts to current or prospective customers is deductible up to a maximum of $25 per customer per year.
Within the day-to-day life of your small business, you will incur ordinary and necessary expenses that you can deduct when filing your taxes. So what does that mean?
"Ordinary" means they are common and accepted in the general industry in which the business owner is working. "Necessary" means they are appropriate and required in operating your small business. Keep reading for more information on specific expenses you can deduct as a business owner.