Since the 4th of July is next week, and we’re in full summer picnic mode, we thought we’d talk about the deductibility of company picnics.
There was a lot of talk earlier this year about business entertainment deductions changing under the Tax Cuts and Jobs Act (TCJA.) Particularly those expenses related to client or customer meals and entertainment.
Despite all changes to entertainment deductions, a business can still write off the full cost of a company picnic as long as it meets certain requirements.
A tax code provision allows a business to deduct 100 percent of the cost of a company-wide get-together, as long as the ENTIRE STAFF is invited. Otherwise, the expense is deductible according to regular business entertainment rules.
What about company outings that include outside guests? That doesn’t jeopardize the deduction related to employees. However any expenses attributed to those guests are non-deductible.
So go ahead and have that summer outing. This can be a good way to help build company morale on Uncle Sam’s dime.
If you need help figuring out the deductibility of your company’s outings, let’s talk.