Meals and entertainment (M&E) expenses are an important cost of doing business. Unfortunately, if the M&E expenses are not reported properly, companies may end up losing significant deductions. A taxpayer’s deduction for business M&E is generally limited to 50% of the costs incurred. Our experience has shown that taxpayers frequently overlook statutory exceptions that allow certain M&E costs to be deducted at 100%. In many cases, these opportunities are missed because of inefficient systems and too few resources. Given the recent tax reform changes to the M&E provisions, the time is right for taxpayers to take a fresh look at their processes and systems related to M&E expenditures.
Our team of professionals has years of experiencing assisting taxpayers with managing their M&E expenditures. A&M’s approach is designed to identify additional savings with minimum disruption to your staff. Our services including the following:
- Reviewing current state processes for capturing M&E expenses;
- Identifying fully deductible M&E expenditures based on available exceptions;
- Using statistical sampling to manage and analyze detailed data in accordance with Rev. Proc. 2011-42;
- Preparing audit-ready deliverable that supports calculations and positions;
- Designing process and system changes that enable taxpayers to take advantage of favorable provisions.
Benefits to You
Working with A&M’s RCIS professionals will allow you to improve your M&E reporting and deliver real results. These benefits include the following:
- Increased cash flow,
- Reduced effective tax rate, and
- Improved controls to reduce risk of error.