12 Aug Restaurant Meals a 100% Business Deduction
The Consolidated Appropriations Act, 2021 increased the business-meal deduction for the cost of food and beverages provided by a restaurant to 100 percent for 2021 and 2022. But not for every meal! IRS Notice from April 8 Notice 2021-25 provides guidance on the higher meal limit.
What are the Requirements?
For meals purchased Jan. 1, 2021 through Dec. 31, 2022, a business may claim 100 percent of food or beverage expense if:
- Its paid to a “restaurant,”
- The business owner or employee is present when provided and business is discussed, and
- The expense is not lavish or extravagant under the circumstances.
What does all that mean?
A Restaurant is defined as one that regularly and primarily sells food for immediate consumption. Food from grocery stores, convenience stores and vending machines, among others, do not qualify. Sorry, that giant pickle and energy drink at the local gas station does not qualify.
Business discussed does not mean eating your breakfast alone at the coffee shop texting a client. Don’t bring us your daily coffee and bagel receipt and hope to claim it.
Lavish or extravagant is not defined, but use common sense. You’re not discussing business at the county fair but sipping on a $1,000 bottle of champagne and eating caviar…if you manage to find this at your county fair, good for you, but it’ll still only be a 50% deduction.
What should I do to claim this?
Keep your receipts, a good record of business meetings and and honest head on your shoulders. Need help with any of these? Call us to schedule an appointment – 624-524-4888 or 614-310-0506. Bring your spreadsheets, accounting ledger or a giant paper bag full of receipts (we’ve seen it all).