Booking Meals & Entertainment Expenses

(Canada)

Hi There,

I am using QB and was wondering how I should book the meals and entertainment expenses given that they only have a 50% eligibility.

Do I just simply cut the expense and related GST in half and book that portion? I ask because I've seen accountants wanting these expenses booked at 100% in the past but I don't understand how you can keep your GST filings straight if you book 100%.

Thanks for any advice.

Hello There Yourself!

CRA allows two ways to make the 50% limitation on meals and entertainment expenses adjustment. I mention this in Part 1 of Home Business Taxes ... along with a reference.

Your options are annually ... which some accountants may prefer ... or during each reporting period.

If the annual adjustment method is selected, I explain where to make the adjustment on your GST form in The Bookkeeping Tips.

If you select to report the adjustment monthly ... and are using QuickBooks ... head on over to the Intuit website. There is a free webinar on Understanding HST in Ontario. The presenter covers how to setup HST to capture the the 50% adjustment meal and entertainment adjustment while you are entering your data.

You can find the webinar at www.community.intuit.com. Click on Help with Intuit Products > International> QuickBooks Canada> Media Library (Canada).

I'm not giving you the actual link because they seem to move it around. This way, even if the webcast gets moved around, you'll have some idea of where to find it.

If you have questions once you've viewed the webcast, post back here and I'll help you out.

See also the GST on Meals Adjustment for more discussion on how to handle this issue.

Hope this is the information you were looking for and that it proves helpful. Have a fantastic day! :0)