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REG3 SIMs, REG320156, REG320104, REG320019, REG320081, REG320212,…

- - - - $3,950, Increase: As per the Tax Cut and Jobs Act (TCJA), business meals are 50% deductible only if they directly relate with the conduct of business and do not include any entertainment value. Also as per TCJA, starting 2018, business entertainment expenses are non-deductible even if they are associated with the business (50% deductible earlier). Expenses incurred during business travel lodging and transportation and incidental expenses are 100% deductible except meals that is 50% deductible. Also, no deduction is allowed for personal portion of employee expenses, such as the transportation expenses of the employee spouses, unless the spouse is an employee of the corporation.
      - The Consolidated Appropriations Act (CAA) of 2020 revised the provision to have businesses claim 100% deduction for food and beverage purchased from a restaurant for 2021 and 2022. This includes carry-out and delivery meals. However, the increased deductibility of business meals expenses is temporary and applies only with respect to amounts paid or incurred after December 31, 2020, and before January 1, 2023. Other requirements for deductibility like the expense being ordinary and necessary and incurred in carrying out a trade or business remain intact.
      - Accordingly, an M-1 adjustment would be required for 100% of entertainment expenses of $3,750 and 100% of spouse's travel of $200, for a total of $3,950. This would have an effect of increase on the taxable income.