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Check, Please: Deductions for Business Meals and Entertainment Expenses Have Changed

Man in suit jacket holds his cell phone in his left hand while holding a fork sitting across from a colleague. Man in suit jacket holds his cell phone in his left hand while holding a fork sitting across from a colleague.

If you think that recent sandwich-spread for your internal business meeting or meal with your business partners at the restaurant was eligible for a 100% tax deduction, you’d better think again.

As of January 1, 2023, the deduction of a business-related meal will revert to the standard 50% limitation as outlined in the Tax Cuts and Jobs Act of 2017.

Previously, under the Consolidated Appropriations Act of 2020, taxpayers have been able to deduct 100% of the cost of meals in 2021 and 2022, as long as they were purchased from a restaurant with a business purpose. This legislation was meant to reward businesses for supporting the struggling restaurant industry, hurt by the pandemic.

Below is a reference chart showing the types of business meal and entertainment expenses, and the deductibility you can expect moving forward.

Click here to download a PDF of the Business Meals and Entertainment Expenses Reference Chart.

Navigating these changes can always be challenging, and every situation is unique. The tax experts at Ellin & Tucker are always prepared to help you get a better understanding of how these changes impact you and your business.

Post Date February 16, 2023
Rich Toomey tax principal. Richard S. Toomey, II, CPA, MSA is a principal in the tax department of Ellin & Tucker. He may be reached at insights@ellinandtucker.com.

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