HERE'S WHAT BUSINESSES NEED TO KNOW ABOUT THE ENHANCED BUSINESS MEAL DEDUCTION

For 2021 and 2022, only businesses can generally deduct the full cost of business-related food and beverage purchases from restaurants. Otherwise, the limit is usually 50% of the cost of the meal.

To qualify for the enhanced deduction:

•  The business owner or an employee of the business must be present when food or beverages are provided.

• Meals must be from restaurants, which include businesses that prepare and sell food or beverages to retail customers for immediate on-premise or off-premise consumption.

• Payment or billing for the food and beverages occurs after December 31, 2020, and before January 1, 2023. 

• The expense cannot be lavish or extravagant.

Here's what business owners need to know about certain costs:

• The cost of the meal can include taxes and tips.

• The cost of transportation to and from the meal isn't part of the cost of a business meal.

Entertainment Events:

Business owners may be able to deduct the costs of meals and beverages provided during an entertainment event if either of these apply:

• The purchase of the food and beverages occurs separately from the entertainment.

• The cost of food and beverages is separate from the cost of entertainment on one or more separate bills, invoices, or receipts.

This document is designed for general information only. The information presented on this document should not be construed to be formal legal or tax advice nor the formation of a lawyer/client relationship. 

For more information on this and other topics, please contact Kevin via any of the channels listed below:

📧kevin@kmckernan.com or 📞718-317-5007