The article discusses changes to the business meal deduction for the year 2023 and beyond.
As of now, the deduction for business meals is only 50 percent—a significant change from the previous 100 percent deduction for business meals in and from restaurants, which was applicable only for the years 2021 and 2022.
Additionally, many business-generating entertainment deductions were eliminated by the Tax Cuts and Jobs Act, such as the costs associated with playing golf with customers and prospects.
To help you better understand the current situation, see the table below outlining what is now permissible under the law for 2023 and beyond.
Amount Deductible for Tax Year 2023 and Beyond |
|||
| Description | 100% | 50% | Zero |
| Restaurant meals with clients and prospects1 | X | ||
| Entertainment such as baseball and football games with clients and prospects2 | X | ||
| Employee meals for convenience of employer, served by in-house cafeteria3 | X | ||
| Employee meals for required business meeting, purchased from a restaurant4 | X | ||
| Meal served at chamber of commerce meeting held in a hotel meeting room5 | X | ||
| Meal consumed in a fancy restaurant while in overnight business travel status6 | X | ||
| Meals cooked by you in your hotel room kitchen while traveling away from home overnight7 | X | ||
| Year-end party for employees and spouses8 | X | ||
| Golf outing for employees and spouses9 | X | ||
| Year-end party for customers10 | X | ||
| Meals made on premises for general public at marketing presentation11 | X | ||
| Team-building recreational event for all employees12 | X | ||
| Golf or theater outing or football game with your best customer13 | X | ||
| Meal with a prospective customer at a country club following your non-deductible round of golf14 | X | ||
Takeaways
The table in this article covers a range of scenarios related to business meals and entertainment, including employee meals served by an in-house cafeteria, meals purchased from a restaurant for required business meetings, restaurant meals with clients and prospects, and meals consumed while in overnight business travel status.
The table also shows non-deductible expenses, such as meals with prospective customers following non-deductible rounds of golf.
Additionally, the table shows some 100 percent deductible entertainment expenses, such as teambuilding recreational events for all employees and non-deductible outings with best customers, including golf, theater, or football games.
With its helicopter view, the table is a valuable summary resource. Make sure to check it out periodically.
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