Tax Newsletter

• Rental Income and Expense Deductions
  The Internal Revenue Service (IRS) defines rental income to include any payment received as a result of the use or occupancy of property. Vacation homes, condominiums, mobile homes, boats, and even portions of property may be a source... Read more.
• Federal Tax Liens and Tenancy by the Entirety
  There are several forms of joint ownership of property, some of which provide that upon the death of one owner, the property automatically passes to the joint owner(s) (i.e., by right of survivorship). These types of joint ownership may... Read more.
• Obtaining Tax Relief Through the Innocent Spouse Doctrine
  Many married couples file joint tax returns to take advantage of certain benefits offered by this filing status. This may result in the unfortunate and unintended consequence of one spouse being held responsible for the underreporting... Read more.
• Tax Advantages of Flexible Spending Accounts
  To provide some relief from rising health care and dependent care costs, federal tax laws authorize the establishment of “flexible spending accounts” (FSAs), sometimes known as “flexible reimbursement accounts.”... Read more.

• Supreme Court rules for homeowner in ‘equity theft’ dispute
• The IRS is building its own online tax filing system. Tax-prep companies aren’t happy
• Gov. Lee Signs Single Largest Tax Cut in Tennessee History into Law
• Mickey goes to law school: Disney sues DeSantis & state officials over their 50-year+ special tax deal reductions
• Forget to File Your 2019 Taxes? You Still Can if You Want Your Refund.

Entertainment and Meals: The 50% Rule and Exceptions

In most cases, you can deduct no more than 50% of certain unreimbursed business-related meals and entertainment expenses on your income tax return. This limit applies to employees or their employers, and to the self-employed.

Exceptions

However, you may be able to deduct more than 50% of an expense if it meets one of the following exceptions:

• Your employer reimburses you for the expense under an accountable plan
• Your business entails the sales of meals or a form of entertainment
• The expense is for a charitable sporting event
• The expense is for advertising
• You are self-employed

Self-Employment

If you are self-employed, you may be exempt from the 50% limit if:

• Your expenses are because you are an independent contractor
• Your client reimburses you for your expenses
• You provide adequate records of these expenses to your customer or client

You must meet all three of these requirements in order to be exempt from the 50% limit rule.

Entertainment Tickets

Usually, you cannot deduct more than the face value of a ticket that you claim as an entertainment expense. You cannot deduct service fees or any amount over the face value that you may have paid a scalper.

However, if the ticket is for a sports event that benefits a charitable organization, you may consider the full cost of the ticket, even if it is more than face value, if:

• The event’s main purpose is to benefit a qualified charitable organization
• Entire net proceeds go to the charity
• The event uses volunteers to perform substantially all the event’s work

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