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Business Meals & Entertainment Expenses under the New Tax Law

The New Tax Law Takes a Huge Bite out of

Business Meals & Entertainment Expense Deduction –

Effective January 1, 2018!

Previously, a taxpayer could deduct 50% of business meals and entertainment.

The New Tax Law effectively would serve to disallow business meals and entertainment expenses!

 

It’s So Hard to Say Good-Bye to Yesterday…

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Breaking it down a little more –>

BUSINESS RELATED – NOT DEDUCTIBLE

Entertainment. Employer tax deductions for business entertainment expenses are removed by the new tax law.  Bye Bye deduction for dues to social, athletic or sporting clubs — even if the membership is used primarily in furtherance of the taxpayer’s business. That also means no deduction for luxury boxes at stadiums/arenas, theatre and concert tickets, or hosting golf outings.

In general, the 50% employer tax deductions for business entertainment expenses are removed.

Business meals. Bye bye deductible power lunches! Employer tax deductions for business meals are removed by the new tax law, with a temporary exception.

Exception – business meals will be deductible up to 50% (previously 100%) if provided through an in-house cafeteria or meals, or if provided as a de-minimis fringe benefit by the employer for the convenience of the employer, until 2025 when that deduction goes away entirely as well.

EMPLOYEE RELATED – DEDUCTIBLE

Business meal and entertainment expenses remain deductible if incurred for recreational, social, or similar activities (including facilities, but not club, dues) primarily for the benefit of employees (except those employees that are highly compensated); e.g., an office holiday party and meals employees consume while traveling for work.

Said anther way, employee related business meals remain 50% deductible and recreational and social employee expenses remain 100% deductible.

Employees can still exclude the benefit of employee meals from income.

The Joint Committee on Taxation estimates the change will bring in $23.5 billion in tax revenue over the next decade.

PLANNING POINTER – Over time there will be technical corrections and clarifications, but for now it is important to focus on appropriately classifying deductions as advertising (e.g., sponsorship of an event) vs. entertainment and tracking what expenses are travel meals of employees (partially deductible) vs. entertainment (non-deductible).

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Key Estate, Gift and GST Provisions of the Bill from the House Ways & Means

How long is the tax code: It is far shorter than 70,000 pages.The basic exclusion amount is doubled from $5 million (as of 2011) to $10 million, which is indexed for inflation, for tax years beginning after 2017.

 

Beginning after 2023, the estate and generation-skipping taxes are repealed while maintaining a beneficiary’s stepped-up basis in estate property.

 

The gift tax is lowered to a top rate of 35 percent and retains a basic exclusion amount of $10 million and an annual exclusion of $14,000 (as of 2017), also indexed for inflation.

 

Senate version due by Thanksgiving, then they must negotiate a compromise (i.e., reconciliation).

Women are Better at Estate Planning then Men

Joke Wallpapers - Wallpaper Cave

I stumbled upon this joke:

Dan was a single guy living at home with his father, and working in the family business. When he found out he was going to inherit a fortune when his sickly father died, he decided he needed a wife with whom to share his fortune.

One evening at an investment meeting, he spotted the most beautiful woman he had ever seen. Her natural beauty took his breath away. “I may look like just an ordinary man,” he said to her, “but in a short time my father will die, and I’ll inherit 20 million dollars.” 

Impressed, the woman obtained his business card and three days later, she married his father.

 

 

Digital Asset Law Breaking News: Personal Representative May Be Given Access to Decedent’s Email!

Digital Estate Planning: How To Organize All Your Digital ...

On October 16, 2017, the  Supreme Judicial Court of Massachusetts ruled favorably on a Personal Representative’s access to a deceased user’s online accounts and digital property (Ajemian v. Yahoo). This is the first reported case with respect to access to digital assets by a fiduciary.
When You’re Asked to Be a Personal Representative of an ...

The conundrum: Email are part of a deceased user’s estate.  But a personal representative (aka executor) can’t read them without violating Federal privacy or anti-hacking law.  The Ajemian case is the first to permit access and will empower fiduciaries though out the US.

10 Things You Need to Know

(1) This is the first case in the country to answer the specific question of “lawful consent” by a fiduciary under the Stored Communications Act (SCA).*

(2) SCA = protection of privacy.

(3) Privacy protections = significant obstacle for personal representatives trying to gain access to a deceased users online accounts and digital property, including and more specifically emails.

(4) When the SCA applies, the online company (think Yahoo, Google, Facebook, Microsoft…) is prohibited from disclosing the contents of electronic communications or files to anyone (this includes family members and fiduciaries) other than the user.

(5) SCA Exceptions = online company may voluntarily disclose such information, but IS NOT required.

(7) Voluntary disclosure is restricted unless a statutory exception under the SCA applies.**

(8) Enter the Lawful Consent Exception to the SCA.***

The text of the SCA does not explicitly answer whether a fiduciary of a deceased user may grant “lawful consent” on behalf of such deceased user in order for the online company to voluntarily disclose account contents. This is the first case to answer that question. This case answered that question by holding – a personal representative of a deceased user may provide lawful consent on the deceased user’s behalf in order for the online company to release the contents of a deceased user’s email account.

(9) Note – Ajemian means that the “lawful consent” exception to the SCA applies to personal representatives, and thus while the online company is not required to disclose the contents, the Court held that it may disclose.

(10) Enter RUFADAA (Revised Uniform Fiduciary Access to Digital Assets Act).  RUFADAA provides state law procedures for fiduciaries to request disclosure from online companies, including obtaining a court order if necessary.  38 states have a digital asset act (36 enacted RUFADAA). Massachusetts, whose law applied in the Ajemian, has neither. RUFADAA works best when certain “magic”words are in the relevant estate planning documents – Will, Trust and Power of Attorney.

Questions? Email me! Sasha@warddamon.com

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  • *SCA is found at U.S.C. §§2701 – 2712
  • **§2702(b) – Exceptions to the SCA.
  • ***§2702(b)(3) Lawful consent exception.

What To Say To Your Friend Who’s Already Counting Down To Football Season…theSkimm

The newest perk for Amazon Prime members includes Tom Brady, Cam ...

“So is Amazon. Yesterday, it came out that the company struck a $50 million deal with the NFL to livestream football games this year. This comes as people continue to cut that TV cord in favor of options like Netflix and Hulu. And as Amazon’s been continuing to try to take over the world one online shopping cart at a time, it’s also been trying to get more eyeballs – and cash money – by pushing into the video and TV biz. The NFL games will still be on regular ‘ole network TV. But now Amazon Prime members can get in on the game action too. And since sports are a big reason people keep their cable subscriptions, this is one more fumble for cable companies. Touchdown, Amazon.

THANK you to theSkimm for this blog-post.  see more great theSkimm news here –> http://www.theskimm.com/?r=b9094b9b

theSkimm is the best thing to happen to my mornings since coffee! I ...

Someone Gave Me a Shotgun?? 

This was my first time ever shooting a gun – much less one almost as long as I am!!  Had such a blast! The recoil is shocking, but worth it! 

PULL!!! 

Get ’em – those clay pigeons & rabbits!  Got a few doubles my first time out – shocked myself! 

The Applicable Federal Rates (AFRs) Continue to Rise!!

Malaysia Epf Interest Rate For 2015 - newhairstylesformen2014.com

Moving on Up!!!

For April 2017, the AFRs continue to rise –

Short Term is 1.11%

Mid Term is 2.12%

Long Term is 2.82%

It was not that long ago that short term rates were under .50%.

See full chart of April 2017 rates here –> https://www.irs.gov/pub/irs-drop/rr-17-08.pdf

The 7520 rate of 2.6% is the highest its been since June of 2011.

AFRs basically set the floor as to what interest rate can be charged for intra-family loans.  If the interest on a loan is lower than the AFR, it could result in a taxable event.

Want to learn more – http://www.investopedia.com/terms/a/applicablefederalrate.asp.

the internal revenue service has released the applicable federal rates ...

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