Temporary 100% Meal Expense Deduction

Eat up and order dessert! For a limited time, businesses will be able to deduct 100 percent of food or beverage expenses to help restaurants hit hard by the COVID-19 pandemic. Normally, only 50 percent of the total amount would be tax deductible.

There are regulations to follow in order to take the full advantage of this tax break. Food and beverages purchased in a restaurant after December 31, 2020 through January 1, 2023 are eligible for the 100 percent deduction. A restaurant is defined as a business that prepares and sells food or beverages to customers for immediate consumption. The food and beverage does not need to be consumed on the premises, which allows take-out and delivery to be 100 percent deductible as well.

If the business primarily sells food or beverage in prepackaged containers, the 50 percent deduction would apply. The following businesses sell food and beverages but are not considered to be a restaurant and therefore not eligible for the 100 percent deduction.

• Grocery store

• Specialty food store

• Beer, wine or liquor store

• Drug store

• Convenience store

• Newsstand

• Vending machine

• Kiosk

Support your local restaurants and take home a sweet tax break! Make sure to keep track of your receipts, and if your business needs help automating your expenses, schedule a free consultation with a professional bookkeeper today!