Correction to the 2018 Publication 225, Farmer's Tax Guide

If you downloaded the 2018 revision of Publication 225, Farmer's Tax Guide, before December 06, 2018, please note the following.

On page 24, under the "Meals" section heading, the first paragraph should read:

You ordinarily can deduct only 50% of your non-entertainment business-related meals expenses. You can deduct the cost of your meals while traveling on business only if your business trip is overnight or long enough to require you to stop for sleep or rest to properly perform your duties. You can't deduct any of the cost meals if it isn't necessary for you to rest. For information on entertainment expense, see Pub. 463, chapter 2.

Also, on page 24, the "Meals" section was revised to add a new "Note" at the end of the discussion that reads:

No deduction is allowed for certain entertainment expenses, membership dues, and facilities used in connection with these activities for amounts paid or incurred after December 31, 2017. See section 274 of the Internal Revenue Code, as amended by the Tax Cuts and Jobs Act, section 13304.

On page 26, under the "Fines and penalties" section heading it should read:

Generally, no deduction is allowed for fines and penalties paid to a government or specified non-governmental entity for the violation of any law except:

  • Amounts that constitute restitution;
  • Amounts paid to come into compliance with the law;
  • Amounts paid or incurred as the result of certain court orders in which no government or specified non-governmental agency is a party; and
  • Amounts paid or incurred for taxes due.

On or after December 22, 2017, no deduction is allowed for the restitution amount or amount paid to come into compliance with the law unless the amounts are specifically identified in the settlement agreement or court order. Also, any amount paid or incurred as reimbursement to the Government for the costs of any investigation or litigation are not eligible for the exceptions and are nondeductible.

See section 162(f) of the Internal Revenue Code, as amended by the Tax Cuts and Jobs Act, section 13306.

For the deductibility of penalties for exceeding marketing quotas, see Marketing Quota Penalties, earlier.

The corrected version of the 2018 Publication 225 is available for download.