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  • Khanh Pham

Take Advantage of IRS Enhanced Business Meal Deduction

For 2021 and 2022 only, businesses can generally deduct the FULL cost of business-related food and beverages purchased from a restaurant. 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 includes businesses that prepare and sell food or beverages to retail customers for immediate on-premises or off-premises 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 the food and beverages is separate from the cost of the entertainment on one or more bills, invoices, or receipts.


If you have additional questions on how to save more in tax money with the enhanced business meal deduction, give the team at RP Financial Services a call today or book your FREE appointment here: https://calendly.com/rpfs/consult-with-ea


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