Ask the COMMUNITY expert Taxes NEWS
BUSINESS CAN NOW DEDUCT 100% OF MEALS!
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hat’s right. The government wants you taking clients out and supporting the restaurant industry. As usual, the federal income tax treatment of business-related meal and entertainment expenses has been a moving target. If you’re confused about what rules currently apply, I don’t blame you. But let’s try to clear some of the rules for 2021. A 2020 COVID-19 relief bill made taxpayer-friendly changes A taxpayer-friendly change in the CAA — the COVID-19 relief bill that became law late last year — allows you to write off 100% of the cost of businessrelated food and beverages provided by restaurants in 2021 and 2022. The “provided by” 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. 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. What’s considered a food and beverage cost 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 — including any sales tax, delivery fees, and tips.
Ryan Dodson has a Masters in Accounting from North Carolina State University. He worked in public accounting with Deloitte and Arthur Andersen. He and his wife Tiffany own and operate Liberty Tax Service. 405 East Dixie Drive•Asheboro, NC 27203 (336) 629-4700 12 | asheboromagazine.com
