Be proactive in your tax planning. LLG can help identify various strategies to help you make the most of the significant changes that went into effect for the upcoming year. Click on the below link to view the:
Every year, LLG participates in the Illinois CPA Society’s Day of Service. It is a wonderful opportunity to volunteer within our community and have fun while helping to enriching the lives of others. On September 18th, the firm spent the day at Random Acts of Flowers. This amazing organization recycles donated flowers and delivers them to local health care facilities boosting the residents’ emotional health and well-being. This simple act of love and kindness offers such encouragement. Flowers always brighten someone’s day.
Click here for information about the Tax Cuts and Jobs Act – Section 199A deduction: November 2018 Client 199A Letter
To read the current Client Newsletter, please click Tax and Business Letter Summer 2019
LLG Memories – Day of Service
Each year, LLG participates in the Illinois CPA Society’s Day of Service. There are great opportunities out there to volunteer within our community, having fun while helping to enriching the lives of others. Past organizations we have been fortunate to visit include: North Lawndale College Prep, Anti-Cruelty Society, Journeys – The Path Home, Feed My Starving Children, and Watts of Love.
This year will be no different as the 2019 Day of Service has been announced for September. We are currently in the planning phase to determine who and how we can help this year. But it is always fun to stroll back down Memory Lane…
LLG Crosses Tax Season Finish Line
It was a feverishly paced March and April of 2019 racing through this year’s tax season, but the LLG staff handled whatever curves came our way to greet the checkered flag like Champs! Afterwards, it was time to celebrate and unwind. We were able to enjoy some time at K1 Racing Complex as a group for a little healthy competition and a lot of speed. Qualifying race set the tone and the Championship race brought out the winners.
First Place: Mike Rice
Second Place: Neshant Dedakia
Third Place: Aaron Zimmerman
Click here to view the Client Bulletin for February, 2019: Client Bulletin Feb 2019
THE NEW TAX REFORM LAW TAKES A BITE OUT OF MEALS, ENTERTAINMENT, AND TRANSPORTATION DEDUCTIONS
By Jay M. Rubinstein
The Tax Cuts and Jobs Act, (TCJA), although being pro-business in many respects, limits the deductibility of meals, entertainment, and transportation expenses. In the past, taxpayers could deduct 50% of expenses for business related meals and entertainment. But under the new law, many clients are asking questions regarding these new limitations. We have simplified the changes so you and your business can have a quick guide to understanding the new law and how these deductions can help you manage the cost and deductibility of these expenses.
Prior to 2018, the entertainment strategy of a business was to give the customer/prospect a good time and 50% of the cost of event tickets or other entertainment could be deducted. A charitable event cost was 100% deductible. But no longer; the TCJA has repealed the deduction for all client/prospect related entertainment or amusement activities. No more deductions for sporting events, nightclubs, or sunset boat rides.
But there is good news for deducting one aspect of customer/prospect entertainment: the reasonable cost of a business related meal is still 50% deductible. I recommend that the meal be in a food venue such as a restaurant. Meal or food expenses that are incurred at a club or event will likely be disallowed by the IRS as being an entertainment expense, which is no longer deductible, rather than a “meal” expense which is still 50% deductible.
TAKING CARE OF BUSINESS-EMPLOYEE MEALS…
Meals provided for the employer’s convenience remain 50% deductible through 2025. In 2026 they become nondeductible. This 50% deduction applies to all snacks, beverages, and other food items. Office parties when everyone is invited remains 100% deductible. It seems the cost of a party for a group of employees is also still deductible at 100%. This would be when an entire department has a party for achieving a goal for example, but the cost of a meal brought in for just managers only would be deductible at only 50% since everyone in the group was not participating. All employee meal expenses while traveling remain 50% deductible.
EMPLOYEE TRANSPORTATION PERKS…
Employee transportation benefits for parking, transit passes, and bike commuting were deductible. These expenses are no longer deductible for travel between the employee’s home and workplace, with two exceptions: transportation considered necessary for the employee’s safety and for bike commuters who can be reimbursed up to $20 per month. Note that if your business still reimburses transportation costs, employees can still exclude these benefits from income.
THE AWARD FOR THE EMPLOYEE OF THE MONTH GOES TO… Previously employee awards of up to $400 per award or $1,600 per year were fully deductible and not taxable to the employee. Under TCJA, the dollar limits remain the same and the employee does not have to declare the award, but cash, gift cards, certificates, vouchers, stocks/bonds, lodging, and coupons are not deductible by the employer. To be deductible the award must be tangible goods.
Here is a quick reference recap of the new law as it relates to meals and entertainment:
EXPENSE / DEDUCTIBLE
Entertainment expenses at an event, club, or social venue / NO
Meals with customers/prospects involving business topics at a restaurant / 50%
On premise meals, snacks, or beverages for convenience of employer / 50%
Meals for traveling employees / 50%
Company social events such as a holiday party or summer BBQ / 100%
Jay M. Rubinstein, J.D., M.B.A., is a senior tax manager at LLG with 30+ years experience in federal and state taxation. If you have any questions, please contact him at 847-205-5420 or firstname.lastname@example.org.