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Meals and Entertainment deduction in 2022


When I speak with a business owner regarding meals and entertainment deduction, some get surprised when I explain that not every expense is a 100% deductible.

Sometimes it's 100 percent deductible, other times it's 50 percent, and also sometimes it can't be deductible.

It all depends on the purpose of the meal or event, and who benefits from it.


2022 meals and entertainment deduction

As part of the Consolidated Appropriations Act signed into law on December 27, 2020, the deductibility of meals is changing. Food and beverages will be 100% deductible if purchased from a restaurant in 2021 and 2022.


Here are some examples:

Type of Expense

Deduction

Entertaining clients (concert tickets, golf games, etc.)

0% deductible

Business meals with clients

50% deductible (100% if purchased from a restaurant)

Office snacks and meals

50% deductible (100% if purchased from a restaurant)

Company-wide party

100% deductible

Meals & entertainment (included in compensation)

100% deductible

Entertainment tax deduction

If you were deducting meals and entertainment in previous years, you might have noticed the deduction amounts have changed. The 2018 Tax Cuts and Jobs Act brought a few big changes to meals and entertainment deductions.

The biggest one: entertainment expenses are no longer deductible. But some things haven’t changed.


Here’s a summary table of the most popular deductions, and how they’ve changed since 2017.

Type of Expense

2017 (old rules)

2018 (new rules)

2019 (new rules)

Entertaining clients (concert tickets, golf games, etc.)

50% deductible

0% deductible

0% deductible

Business meals with clients

50% deductible

50% deductible

50% deductible

Office snacks and meals

100% deductible

50% deductible

50% deductible

Company-wide party

100% deductible

100% deductible

100% deductible

Meals & entertainment (included in compensation)

100% deductible

100% deductible

100% deductible


So, what’s nondeductible?

Most work-related meal purchases you can think of are either 100 or 50 percent deductible. But there are a few exceptions. For example, if you pay for your clients’ night out but you don’t actually go with them, it’s nondeductible. The same applies to a client meal at a restaurant where you invite friends or spouses—the cost of your friends is nondeductible (but you can write off half the client bill).

And of course, with the Tax Cuts and Jobs Act, client entertainment is also nondeductible.


no more golf games or courtside tickets.

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