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:
The expense is not lavish or extravagant under the circumstances (seems to be open to interpretaion), and
The taxpayer or an employee of the taxpayer is present at the furnishing of the food and beverages, and
The food and beverages are provided to the taxpayer or a business associate.
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.