
New Information Regarding Tax Deductions for Meals
The IRS has provided guidance on deductions for meals as a part of changes in the Consilidated Appropriations Act (CAA). The CAA is part of the COVID-19 Tax Relief Bill which was recently passed to law. The CAA has made it possible for business-related restaurant expenses to be 100% deductible as of 2021-2022, an increase from the previous 50%. The 100% deductions is allowed if the following criteria are met:
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The expense is not lavish or extravagant under the circumstances (seems to be open to interpretaion), and
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The taxpayer or an employee of the taxpayer is present at the furnishing of the food and beverages, and
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The food and beverages are provided to the taxpayer or a business associate.
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The food must be provided by a restaurant.
This new guidline will have an impact of deductions for 2021 and 2022. Feel free to reach out to us with any more questions you may have.