Restaurant Meals 100% Deductible

For two years, you may deduct 100% of meal expenses provided by a restaurant. Here are the details.

• This rule applies to meal expenses only in 2021 and 2022.

• Meals = Food + Beverages

• The meal expense also includes delivery fees, tips, and sales tax.

• Meals must be provided by restaurants.

• Meals cannot be provided by grocery stores or gas stations.

What should you do?

Keep track of restaurant meals separately from other business meals. This likely means creating a separate account for Restaurant meals in your chart of accounts via your accounting software. You’ll be thankful for this separate tracking at tax time.

Reminders

Business meals are only deductible (50% or 100%) if the the following guidelines are met. Meal expenses must…

• Be ordinary and necessary for your business.

• Not be lavish or extravagant.

• Have the taxpayer or employee present during the meal.

• Be provided to a current or potential customer, client, consultant, or similar business contact.

• Be listed separately on the invoice or receipt (not combined with entertainment expenses, which are not deductible).

The Consolidated Appropriates Act (CAA) signed into law on December 27, 2020, provides for this temporary deduction. To read the actual portion of the bill, refer to page 1,885, Sect. 210, of H.R. 133.

Read IRS Notice 2021-25 for more details.