Order the Steak! IRS to Reinstate Dining Expense Write-Off
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What are the top money and market headlines this episode opens with?
With your money briefing, I'm J.R. Whalen at The Wall Street Journal in New York. Good news from the IRS if you plan to take your business clients out for dinner or drinks. Bad news if you want to go to a show or play a round of golf. We'll explain in a moment. First, these money and market stories you should know.
What does the latest inflation data say about core and headline inflation?
The Core Inflation Index, which excludes food and energy products, was flat in August from July. Meanwhile, the broader inflation index, including food and energy, rose 0.1 percent due to a surge in gas prices. And while many economists predict the Trump administration's trade disputes to put upward pressure on prices in the months ahead, that hasn't happened yet. We've reported here the consumer sentiment rose in September, powered by Americans' confidence in the current and future state of the economy. Well, it turns out America's low-income earners boosted consumer sentiment overall this month, evidence that an economic expansion is benefiting a larger swath of workers.
How did consumer sentiment change in September and who drove it?
Also, confidence among lower-income Americans was the highest since 2000. And JetBlue is introducing bare-bones economy affairs to keep up with competition, from discount air carriers and boost sales as it faces rising labor and fuel costs. The number five U.S.
What airline changes is JetBlue introducing and why does it matter?
carrier by traffic has touted amenities like free Wi-Fi and roomier coach seats as other carriers have pared back their free services. The basic economy fares are $30 to $50 cheaper than standard economy tickets, but leave out amenities like advanced seat assignments, overhead bin space, frequent flyer awards, and other benefits.
If you take your clients out for business meals, there's some good news coming from the IRS. And Wall Street Journal tax reporter Laura Saunders is here to spell out the details for us. So Laura, this has to do with the tax deductibility of client meals.
Yes, it absolutely does. And let me back up and set the stage a little bit here. Last year, when Congress did the great big tax revision,
How will the IRS change tax deductibility for business meals vs. entertainment?
it lowered taxes on business income a lot more than ever before. And in order to sort of raise some of the money to help pay for this, it took away a lot of other deductions. And one of them is it pulled way back on meal and food and entertainment deductions by businesses. That is big corporations, a lawyer in a firm, just all these food deductions and entertainment deductions.
Now, in terms of meals, I mean, that's a sizable expense for a lot of companies.
Well, the worst thing didn't happen to meals. What the worst thing happened to entertainment, they just took that away. If you want to take your client to the ballgame or to, you know, on the company jet for a round of golf, that used to be 50% deductible. Now it's not deductible at all. Oh, not at all? Not at all. Theater tickets, things like that, that's gone. a lot of those perks might be going away exactly and the IRS says hey don't fudge with the numbers yeah well now but then there was this big question that came out of it what about client business meals and because of the bill was pushed through and the drafting was a little sloppy there was a great fear that the normal client business meal would would also be non-deductible the good news here is that appears the IRS is going to issue
some guidance that says the normal business meal probably is deductible. So if you work for three hours on a tricky tax return, go to lunch and come back with the client, you know, probably that meal will continue to be deductible as it was last year.
So you're paying for the round of golf with your client?
You have to pay for the round of golf or the theater tickets, but you still can get some help from Uncle Sam on that meal, unless it's lavish or extravagant. Now, we don't quite know what that means, but it's an elastic term. We hear that on different occasions it can be a very capacious term, that it can include very large expenses for a very big deal.
Which workplace food and entertainment deductions are being reduced or eliminated?
Now, it also says in your column in the Wall Street Journal that this reverses a precedent set involving the Boston Bruins.
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Chapters
6 chapters
1
What are the top money and market headlines this episode opens with?
0:05–0:20
2
What does the latest inflation data say about core and headline inflation?
0:20–0:59
3
How did consumer sentiment change in September and who drove it?
0:59–1:15
4
What airline changes is JetBlue introducing and why does it matter?
1:15–2:03
5
How will the IRS change tax deductibility for business meals vs. entertainment?
2:03–4:07
6
Which workplace food and entertainment deductions are being reduced or eliminated?
4:07–6:03
Speakers
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