The 2017 Tax Law Changes Signaled that the 50% Biz Meals Deduction was gone.
However, The IRS issued new guidance today, many of us expected they would, that allows for Biz Meals Deductions.
Under this notice, taxpayers may deduct 50 percent of an otherwise allowable business meal expense if:
1. The expense is an ordinary and necessary expense under § 162(a) paid or incurred during the taxable year in carrying on any trade or business;
2. The expense is not lavish or extravagant under the circumstances;
3. The taxpayer, or an employee of the taxpayer, is present at the furnishing of the food or beverages;
4. The food and beverages are provided to a current or potential business customer, client, consultant, or similar business contact; and
5. Entertainment is still not deductible so, in the case of food and beverages provided during or at an entertainment activity, the food and beverages must be purchased separately from the entertainment, or the cost of the food and beverages is stated separately from the cost of the entertainment.
Many of my clients are real estate agents, professionals, and small business owners who use restaurants and cafe’s as an alternative office to meet clients, conduct meetings, etc. Great news.
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