While qualifying business meals remain 50% deductible for 2020, the Consolidated Appropriations Act of 2021 (CAA) has expanded the deductibility of business meals and beverages to 100% for those provided by a restaurant in 2021 and 2022.

To be deductible, food and beverage expenses must meet all of the following criteria:

  • The expense is an ordinary and necessary expense of carrying on a trade or business
  • The expense must not be lavish or extravagant under the circumstances
  • The taxpayer, or an employee of the taxpayer, must be present when the food and beverages are provided
  • The food and beverages are provided to the taxpayer or a business associate, such as a customer, client, supplier, employee, agent, partner, or professional adviser, whether established or prospective.

For example, take-out from a restaurant is 100% deductible, but a meal catered by a grocery store would only be 50% deductible.

Consult with your tax professional at Ketel Thorstenson about this or other tax matters because each situation is different. Don’t navigate the difficult and ever changing tax codes and legislation on your own.  Ketel Thorstenson CPAs and tax professionals receive advanced training and continuing education all year long to keep our service on the forefront of the tax industry. Call us today for guidance on tax planning, tax return preparation, and tax legislation affects or questions.