{"id":221703,"date":"2021-04-08T07:03:00","date_gmt":"2021-04-08T04:03:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/when-can-i-deduct-business-meal-and-entertainment-expenses-under-current-tax-rules\/"},"modified":"2021-04-08T07:03:00","modified_gmt":"2021-04-08T04:03:00","slug":"when-can-i-deduct-business-meal-and-entertainment-expenses-under-current-tax-rules","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/when-can-i-deduct-business-meal-and-entertainment-expenses-under-current-tax-rules\/","title":{"rendered":"#\n  When can I deduct business meal and entertainment expenses under current tax rules?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a402958ef679\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a402958ef679\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/when-can-i-deduct-business-meal-and-entertainment-expenses-under-current-tax-rules\/#There_are_several_ways_your_business_can_deduct_100_of_meal_costs_and_even_100_of_eligible_entertainment_expenses\" >There are several ways your business can deduct 100% of meal costs and even 100% of eligible entertainment expenses.<\/a><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/when-can-i-deduct-business-meal-and-entertainment-expenses-under-current-tax-rules\/#A_2020_COVID-19_relief_bill_made_taxpayer-friendly_changes\" >A 2020 COVID-19 relief bill made taxpayer-friendly changes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/when-can-i-deduct-business-meal-and-entertainment-expenses-under-current-tax-rules\/#What_the_earlier_Tax_Cuts_and_Job_Act_TCJA_said\" >What the earlier Tax Cuts and Job Act (TCJA) said<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/when-can-i-deduct-business-meal-and-entertainment-expenses-under-current-tax-rules\/#What_IRS_regulations_say\" >What IRS regulations say<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/when-can-i-deduct-business-meal-and-entertainment-expenses-under-current-tax-rules\/#Whats_considered_a_food_and_beverage_cost\" >What\u2019s considered a food and beverage cost<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/when-can-i-deduct-business-meal-and-entertainment-expenses-under-current-tax-rules\/#Why_you_should_insist_on_detailed_receipts_from_entertainment_venues\" >Why you should insist on detailed receipts from entertainment venues<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/buradabiliyorum.com\/en\/when-can-i-deduct-business-meal-and-entertainment-expenses-under-current-tax-rules\/#Exceptions_to_the_rules_about_business_meals\" >Exceptions to the rules about business meals<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/buradabiliyorum.com\/en\/when-can-i-deduct-business-meal-and-entertainment-expenses-under-current-tax-rules\/#When_you_can_deduct_your_spouses_meals\" >When you can deduct your spouse\u2019s meals<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/buradabiliyorum.com\/en\/when-can-i-deduct-business-meal-and-entertainment-expenses-under-current-tax-rules\/#Some_little-known_deductions_are_still_available\" >Some little-known deductions are still available<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/buradabiliyorum.com\/en\/when-can-i-deduct-business-meal-and-entertainment-expenses-under-current-tax-rules\/#The_bottom_line\" >The bottom line<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/buradabiliyorum.com\/en\/when-can-i-deduct-business-meal-and-entertainment-expenses-under-current-tax-rules\/#Bill_Bischoff\" >Bill Bischoff<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  When can I deduct business meal and entertainment expenses under current tax rules?<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"There_are_several_ways_your_business_can_deduct_100_of_meal_costs_and_even_100_of_eligible_entertainment_expenses\"><\/span>\n  There are several ways your business can deduct 100% of meal costs and even 100% of eligible entertainment expenses.<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div class=\"cx--next\">\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000220098\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       The federal income tax treatment of business-related meal and entertainment expenses has been a moving target. If you\u2019re confused about what rules currently <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ly, I don\u2019t blame you. This column aims to eliminate confusion. That\u2019s an optimistic goal, but here goes.<\/p>\n<div class=\"paywall\">\n<h6><span class=\"ez-toc-section\" id=\"A_2020_COVID-19_relief_bill_made_taxpayer-friendly_changes\"><\/span>A 2020 COVID-19 relief bill made taxpayer-friendly changes<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p> A taxpayer-friendly change in the CAA \u2014 the COVID-19 relief bill that became law late last year \u2014 allows you to write off 100% of the cost of business-related food and beverages provided by restaurants in 2021 and 2022. The \u201cprovided by\u201d language apparently means the temporary 100% deduction rule applies equally to sit-down meals and take out. Before this change, deductions for business meals at restaurants were limited to only 50% of cost.<\/p>\n<p> However, there are some unanswered questions: Do bars that serve food count as restaurants? Presumably they do. What about airport lounges? What about food trucks? Nobody knows. We await IRS guidance.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"What_the_earlier_Tax_Cuts_and_Job_Act_TCJA_said\"><\/span>What the earlier Tax Cuts and Job Act (TCJA) said<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>For 2018 and beyond, the Tax Cuts and Jobs Act (TCJA) permanently eliminated deductions for most business-related entertainment expenses. Before the TCJA, you could deduct 50% of the cost of most business entertainment. But after the TCJA change, you can no longer deduct any part of the cost of taking clients out for a round of golf, to the ball<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">game<\/a>, or for a ride on the Ferris wheel. Rats.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"What_IRS_regulations_say\"><\/span>What IRS regulations say<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>For too long, it was unclear what the impact of the TCJA\u2019S <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> disallowance of write-offs for entertainment expenses would be on the deductibility of business-related meals. In 2020, the IRS finally issued eagerly-awaited regulations. They were written before the CAA change that now allows 100% deductions for business-related restaurant meals in 2021-2022. So, the regulations will need to be updated. Until then, they still provide the useful guidance summarized in the rest of this column.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Whats_considered_a_food_and_beverage_cost\"><\/span>What\u2019s considered a food and beverage cost<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Food and beverages mean all food and beverage items, regardless of whether they are characterized as meals, snacks, or whatever. In turn, food and beverage costs mean the full cost of such items \u2014 including any sales tax, delivery fees, and tips.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Why_you_should_insist_on_detailed_receipts_from_entertainment_venues\"><\/span>Why you should insist on detailed receipts from entertainment venues<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>For purposes of the general disallowance of deductions for entertainment expenses, the term entertainment does not include food and beverages unless: (1) the food and beverages are provided in conjunction with an entertainment activity (for example, hotdogs and beers at a basketball game) and (2) the food and beverages costs are not separately stated.<\/p>\n<p>So, to be deductible, food and beverages consumed in conjunction with an entertainment activity must: (1) be purchased separately from the entertainment or (2) be separately stated on a bill, invoice, or receipt that reflects the usual selling price for the food and beverages if they were purchased separately from the entertainment or the approximate reasonable value of the food and beverages if they were not purchased separately. Fair enough. Insist on detailed receipts from entertainment venues.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Exceptions_to_the_rules_about_business_meals\"><\/span>Exceptions to the rules about business meals<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>According to the IRS regulations, you can still generally deduct 50% of the cost of business-related meals, as was the case before the TCJA. As stated earlier, however, you can deduct 100% of the cost of business meals provided by restaurants in 2021-2022. <\/p>\n<p>All that said, no deduction is allowed for business meals unless:<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<ol class=\"articleList\">\n<li>\n      The expense is not lavish or extravagant under the circumstances (nobody knows what that means), and<\/p>\n<\/li>\n<li>\n      The taxpayer or an employee of the taxpayer is present at the furnishing of the food and beverages, and<\/p>\n<\/li>\n<li>\n      The food and beverages are provided to the taxpayer or a business associate.<\/p>\n<\/li>\n<\/ol>\n<p>Business associate means a person with whom you reasonably expect to deal with in the conduct of your business \u2014 such as an established or prospective customer, client, supplier, employee, agent, partner, or professional adviser.<\/p>\n<p><strong>Key point:<\/strong> The regulations make it clear that you can deduct 50% of the cost of a business-related meal for yourself (say because you get stuck somewhere working late at night). You can deduct 100% of the cost if the business-related meal is provided to you by a restaurant in 2021-2022.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"When_you_can_deduct_your_spouses_meals\"><\/span>When you can deduct your spouse\u2019s meals<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Under the IRS regulations, the general rule is that 50% of the cost of meals (food and beverages) while <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/trip-and-travel\/\" data-internallinksmanager029f6b8e52c=\"10\" title=\"Trip &amp; Travel\" target=\"_blank\" rel=\"noopener\">travel<\/a>ing on business can still be deducted, as was the case before the TCJA. Or 100% for restaurant-provided meals in 2021-2022. The longstanding rules for substantiating meal expenses still apply. Keep receipts.<\/p>\n<p>The regulations also reiterate the longstanding rule that no deductions are allowed for meal expenses incurred for spouses, dependents, or other individuals who accompany the taxpayer on business travel (or accompany an officer or employee of the taxpayer on business travel), unless the expenses would otherwise be deductible by the spouse, dependent or other individual. <\/p>\n<p>For example, meal expenses for your spouse are deductible if he or she works in your unincorporated business and accompanies you on a business trip for legitimate business reasons. The temporary 100% deduction allowance applies to legitimate business-travel-related meals provided to your spouse by restaurants in 2021-2022.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Some_little-known_deductions_are_still_available\"><\/span>Some little-known deductions are still available<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Before the TCJA, the following favorable tax-law exceptions allowed 100% deductibility for eligible meal and entertainment expenses. <\/p>\n<p>A little-known fact is that these exceptions are still available in the tax world that we currently live in. These long-standing but not necessarily well-known exceptions predate the CAA\u2019s temporary 100% deductibility allowance for business-related meals provided by restaurants in 2021-2022.<\/p>\n<ul class=\"articleList\">\n<li>\n      Your business can deduct 100% of meal and entertainment expenses that are reported as taxable compensation to recipient employees. IRS regulations confirm that this exception is still available, and it still covers applicable entertainment expenses.<\/p>\n<\/li>\n<li>\n      Your business can deduct 100% of food, beverage, and entertainment expenses incurred for recreational, <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">social<\/a>, or similar activities that are incurred primarily for the benefit of employees other than certain highly compensated employees (for example, food and beverages and entertainment at company picnics or company holiday parties that can be attended by all). IRS regulations confirm that this exception is still available, and it still covers applicable entertainment expenses.<\/p>\n<\/li>\n<li>\n      Your business can deduct 100% of the cost of food, beverages, and entertainment that is made available to the general public (for example, free snacks at a car dealership or free food and music provided at a promotional event open to the public). IRS regulations confirm that this exception is still available, and it still covers applicable entertainment expenses.<\/p>\n<\/li>\n<li>\n      Your business can deduct 100% of the cost of food, beverages, and entertainment sold to customers for full value, including the cost of related facilities. IRS regulations confirm that this exception is still available, and it still covers applicable entertainment expenses. The regulations also confirm that a restaurant or catering business can still deduct 100% of the cost of food and beverage items that are purchased in connection with preparing and providing meals to paying customers and that are consumed at the worksite by employees who work in the restaurant or catering business.<\/p>\n<\/li>\n<li>\n      Your business can deduct 100% of the cost of meals and entertainment that are reported as taxable income to a non-employee recipient on a Form 1099 (for example, when a potential customer wins a dinner cruise for 10 valued at $750 at a sales presentation and is issued a Form 1099). IRS regulations confirm that this exception is still available, and it still covers applicable entertainment expenses.<\/p>\n<\/li>\n<\/ul>\n<h6><span class=\"ez-toc-section\" id=\"The_bottom_line\"><\/span>The bottom line<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>There you have it: several ways your business can deduct 100% of meal costs and even 100% of eligible entertainment expenses. Party on.<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Bill Bischoff\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Bill_Bischoff\"><\/span>Bill Bischoff<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B21005575-02D4-D4B5-4572-D35BC24F3361%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# When can I deduct business meal and entertainment expenses under current tax rules? &#8221; There are several ways your business can deduct 100% of meal costs and even 100% of eligible entertainment expenses. The federal income tax treatment of business-related meal and entertainment expenses has been a moving target. If you\u2019re confused about what&#8230;<\/p>\n","protected":false},"author":1,"featured_media":221704,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-221703","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/221703","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=221703"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/221703\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/221704"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=221703"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=221703"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=221703"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}