Business meal expenses and tax deductions for businesses

The 2017 tax bill impacted businesses in many ways, many positive.  However, one very negative feature of the bill was the elimination of a tax deduction for business entertainment expenses.  Fortunately, the deduction for business meals was not eliminated.  As such, business owners may continue to deduct (at 50%) the following:

  • The cost for meals while traveling away from home for business.
  • The cost of business meals if the following conditions are met:
    • The meal expense was an ordinary and necessary expense in carrying on the trade or business;
    • The expense was not lavish or extravagant under the circumstances;
    • The taxpayer or the taxpayer’s employee was present at the meal;
    • The meal was provided to a current or potential business customer, client, consultant, or similar business contact; and
  • In the case of food or beverages provided during or at an entertainment event, the food and beverages were purchased separately from the entertainment, or the cost of the food and beverages was stated separately from the cost of the entertainment on one or more bills, invoices, or receipts.