The temporary 100% deduction for food or beverages provided by a restaurant has expired. The business meal deduction reverts back to the previous 50% allowable deduction beginning January 1, 2023.
What meal expenses can be deducted?
You can deduct a percentage of the actual cost of a meal if the following conditions are met:
- The meal expense was an ordinary and necessary expense in carrying on your trade or business.
- The expense was not lavish or extravagant under the circumstances.
- You or your employee was present at the meal.
- The meal was provided to a current or potential business customer, client, consultant, or similar business contact.
- 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.
Where to enter meal expenses?
To enter meal expenses within the program, go to:
- Profit or Loss from Business (Schedule C)
- General Expenses
What were the meal deductions for 2021 and 2022?
For 2021 and 2022 only, businesses can generally deduct the full cost of business-related food and beverages purchased from a restaurant. Otherwise, the limit is usually 50% of the cost of the meal.
For more information, please review the Schedule C instructions here.