Snacks or food at a promotional event for customers or prospects.Snacks, food or treats at an ‘open house’ to show a home if you are a realtor.Under the 2018 TCJA and are still 100% deductible! These are situations where food is paid for in some of the following situations: These are also a type of food expense that survived even if it was food not prepared by a restaurant. Consider this an experience for your rank and file employees. Yes, some types of food expenses survived and are still 100% deductible, even if it was food not prepared by a restaurant! Business owners are allowed to deduct the food and costs for a team building event, or a year-end party exclusively for employees and not the owners of the business, or highly compensated employees. These are expenses such as the coffee maker, water cooler, granola bars and snacks for the employees.Īnd by the way, for those of you with a home office, I’m talking about expenses for your employees, NOT you, your family, or other owners of the business. As such, it’s regrettable because these types of items used to be a 100% deduction prior to passage of the Tax Cuts and Jobs Act (TCJA).

The interesting question is what about bagels on Wednesday or Donuts on Monday? I would argue that since they were prepared by a bakery or deli it would qualify for the 100% deduction…but maybe I’m just a sucker for some good ‘carbs’.īy definition, I don’t think these are going to be items prepared by a restaurant. Remember, Congress is trying to help the restaurant industry with this special rule for two years – not grocery stores. Type 3: Regular Meals with Employees or Staff MeetingsĪgain, 100% write-off in 20 when eating at a restaurant or picking up ‘take-out’.ĥ0% if you go to Costco and pick up hamburgers and hot dogs and grill them in the parking lot for the employees. This includes food, tip, and even the bar tab. Examples would include education or training conferences, or a Board of Directors retreat, checking on a rental property, a business location, or even going to meet a prospect or vendor. Remember, these are dining expenses while traveling for legitimate business meetings. It’s still a write-off, but because it wasn’t ‘prepared’ for you by a restaurant, it would be limited to 50%. It’s only 50% if you stop at 711 and pick up a loaf of bread and some peanut butter and jelly to save a few bucks. You actually don’t have to have lunch with a customer, client, business partner or vendor.Īgain, even if you’re by yourself (but validly traveling for business) you receive a 100% write-off in 20 when eating at a restaurant or picking up ‘take-out’. Meals while traveling outside of a normal commute in your business are still deductible. Hopefully, we’ll see the entertainment expense come back into play in the future (not what the IRS wants, but only if we could wish it so). Congress is trying to help the restaurant industry with this special rule for two years – not grocery stores.Īnd remember, if you decide to do some ‘entertainment’ with the meal, make sure you pay for the food separately. Type 1: Dining with a Prospect or Important Clientġ00% write-off in 20 when eating at a restaurant or picking up ‘take-out’.ĥ0% if you stop at the grocery store and pick up some steaks and cook them up at your home for your important meeting.

Things changed in 2018 under the Tax Cuts and Jobs Act, and then to make it more complex this special 100% rule came into play for literally ‘restaurant prepared food’.įirst, let’s examine the ‘types’ of meals and I’ll try and ‘set the table’ with 6 main options to consider and what you should be tracking in your books.

Now if you’re a little confused at this point, or have more questions, you’re not alone.

The water cooler, coffee and treats in the office picked up at the grocery store are still limited to a 50% deduction. However, remember this 100% deduction is for ‘prepared food’ by a restaurant for a valid business meeting, OR while a business owner is traveling for business. Yes…that’s right! For only two years, 20, business owners incurring a valid business meeting out of the office, or ‘take out’, (supporting a local business for preparing food), can write off 100% of the dining expense. Due to the tremendous damage to the restaurant industry during the Covid Pandemic, before President Trump left office he signed into law the 100% write-off for dining out in 20!!

Live entertainment expense bar