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Q&A: I get this question often, "I am a remote worker who is a resident of and physically work from XYZ state, but my employer is physically located in the State of California. Do I have to pay state income tax to California and if so which taxes and under what circumstances?"

INFORMATION SHEET STATE OF CALIFORNIA: This EDD CA INFO SHEET LINK is a link to an information sheet provided by the Employment Development Department of the State of California regarding MULTISTATE EMPLOYMENT. This CA FTB is a link to the California Franchise Tax Board's "Part-year resident and nonresident" page.  

(always refer to your licensed tax professional for interpretation)

TAX TIP 1/7/2022: What are meals and entertainment expenses?

Entertainment expenses include the cost of meals you provide to customers or clients, whether the meal alone is the entertainment or it's a part of other entertainment (for example, refreshments at a football game). A meal expense includes the cost of food, beverages, taxes, and tips.

The 100% deduction allowable as a business expense in 2021 and 2022 for food or beverages provided by a restaurant applies to the meal portion of a per diem rate or allowance, the IRS clarified Tuesday in Notice 2021-63.

Under Sec. 274(n)(1) and Regs. Sec. 1.274-12, a deduction of any expense for food or beverages generally is limited to 50% of the amount otherwise deductible (i.e., as an ordinary and necessary business expense that is not lavish or extravagant under the circumstances). However, the Consolidated Appropriations Act, 2021, P.L. 116-260, added Sec. 274(n)(2)(D), providing that the full cost of such an expense is deductible if incurred after Dec. 31, 2020, and before Jan. 1, 2023, for food or beverages "provided by a restaurant."

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