Business meals are a common expense, but what is tax deductible can be tricky to understand.
For 2021 and 2022, the Consolidated Appropriations Act of 2021 created a temporary tax incentive allowing a 100% tax deduction of business-related meals purchased at restaurants. This was an increase from the standard 50% tax deduction. As of January 1, 2023, that temporary incentive has expired, and the rules have gone back to a 50% deduction for most business meals.
For 2023, here is a summary of typical expense types and their deductibility –
| Type of Expense | Deduction |
| Business Meals with Clients | 50% |
| Meals with Employees and/or Contractors *employees other than yourself & if less than 50% of staff are present | 50% |
| Meals While Traveling for Business or Conferences | 50% |
| Office Snacks *Does not apply to S-corp owner if the only employee | 50% |
| Entertainment Related Meals *Must be charged separately from other entertainment costs | 50% |
| Meals with Employees and/or Contractors *employees other than yourself & if more than 50% of staff are present | 100% |
| Food for Company Holiday Parties | 100% |
| Food & Beverages Given Free to the Public | 100% |
| Entertainment Expenses (concerts, golfing, sporting events, etc.) | 0% |
| Meals, Groceries, & Snacks for Yourself or Family | 0% |
Below is a link to a great article with additional details.
https://help.collective.com/en/articles/7103985-2023-meals-entertainment-deductions
