One big business deduction to be eliminated under Republican tax bill:
If you have been reading my posts, you know that most of the items that were eliminated were non-business related. This included things like itemized deductions, personal exemptions and some fringe benefits for employees of companies. However, there was one big deduction removed for business that especially hits small businesses.
Both versions of the tax bills eliminate the deductions for meals and entertainment. This is a huge hit for small businesses.
Small business doesn’t usually market by advertising on big events such as the World Series or on the Olympics. In fact, they usually don’t even advertise on television due to the cost. Small business markets using “belly to belly” marketing. They usually discuss business over a meal or drinks. Eliminating this is a big hit for small businesses.
There is still some types of entertainment that are left alone such as business gifts, in-house cafeterias, food and prizes for an “open house” and food and drinks served at sales seminars and opportunity meetings etc. However, the deduction for having a meal or drink with a prospect at a bar or restaurant would potentially be eliminated. This would also apply for deducting fun with a prospect such as going out for golf or deducting sporting tickets.
I would suggest that if you live in a state with a Republican Senator and/or Congressmen, you should contact them and protest this change. You can either write them a letter or simply call their office to make them aware of how important entertainment is for small business.
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