Tax Deductions

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2021 Tax Deductions: Meal Categories

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Under the IRS regulations, you may deduct 50% of the cost of business-related meals. However, in 2021-2022 you can deduct 100% of the cost of business related meals.

50% Meal Deductions:

  • Having a business related lunch with a client, customer or employee.
  • Taxes and tips related to an entertainment activity or meal.
  • Renting a room for a dinner or cocktail party (assuming the event is business related)

100% Meal Deductions:

  • The transportation costs to and from a business meal or entertainment activity are deductible
  • Meals provided at the employer premises for the employer’s convenience (if over 50 percent of the employees are furnished meals)
  • Promotional activities available to the public
  • Social or recreational expenses provided by the employer for the benefit of employees that are not highly compensated, such as a holiday party or summer picnic
  • Business gifts up to $25 to any individual per tax year

Non-deductible Meal items:

  • Lunch with an employee, customer or client without a business purpose or discussion
  • Price of tickets for a sporting event you do not attend
  • Club dues such as golf, athletic and country clubs
  • Extravagant entertainment expenses (unreasonable expenses)
  • Under the Tax Cuts and Jobs Act, entertainment deductions are eliminated.

During the pandemic, this is an important tax deduction to take advantage of. Reach out to learn the proper tax planning strategy to maximize your meal deductions:

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