Although many businesspeople in the US seem to be unaware of the changes, the Tax Cuts and Jobs Act of 2017 significantly tightened the rules related to the deductibility of meal and entertainment expenses for US companies like Localization Ninja. Here are some of the highlights of the new rules:
- Business meals or meals with coworkers and meals while traveling for business are now only 50% deductible.
- De minimis beverages and snacks provided in the office to employees on a regular basis (coffee, donuts, etc.) are now only 50% deductible through the tax year 2025. After 2025, these expenses will no longer be deductible.
- Nondeductible dues include dues for membership in any club organized for business, pleasure, recreation or other social purposes and includes country clubs, athletic clubs, airline clubs, and hotel clubs.
- Professional dues and meetings including business leagues, chambers of commerce, professional organizations such as ATA and JAT, and trade associations are deductible.