100% Business Meal Deduction


Welcome to this week’s business taxation segment. Head over to our YouTube channel or check out this article from Blankenship CPA Group to learn more.

Let’s talk about one of the provisions in the Corona Virus Response and Relief Supplemental Appropriations Act that was passed into law. One of the things that we felt didn’t get very much attention is a temporary provision for business meals for calendar years 2021 and 2022. We will get a 100 percent deduction for business meals for these years. Now, that’s not the entertainment but the business meals.

Why is this a response to the coronavirus? Well, what are some of the businesses who’ve been hardest hit? You may have heard the saying “you never want to see laws or sausages be made” because there’s just so much that goes into the mix, but we want to say we think Congress did a really great job on this particular provision. It’s one way to incentivize people to go back and eat when it when it becomes safe to do so.

The provisions on this is that the meal must be food purchased from a restaurant. In other words, it must be prepared foods. You’re not going to sneak your groceries in under this, and all the other business meal rules apply. It must be with a client. There must be a business purpose. That includes your employees who are traveling more than 100 miles from home. So it’s all really the same. We just won’t apply that limitation of 50% like we’ve been doing since the 1984 Act.

Again, we want to congratulate Congress on this particular provision and also let y’all know that this is out there. It’s not retroactive to 2020, but we’re gonna get it going forward. Plan ahead. Spend a little bit more on that business meal, because you’re gonna get Uncle Sam to underwrite just a little bit more of it this year.

If Harvard Grace can help you navigate all this in any way, give us a call.

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