2023 Meal & Entertainment Deductions

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The Meals & Entertainment Deductions have seen a lot of change in the last several years. In 2017, legislation from the Tax Cuts & Jobs Act (TCJA) placed limitations on the rules that had been in place for decades. Then, the Covid-19 pandemic hit. The Consolidated Appropriations Act (CAA) focused on re-building the economy, and briefly raised the amount of meal-related tax deductions from 2021-2022. Now, we’re back to TCJA rules – leaving meals at 50% and entertainment (mostly) non-deductible. Scroll over the icons in the sections below to learn the details of the various deduction rules.

2023 Meal & Entertainment Deductions

100% Deductible

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Office Party

An office holiday party or picnic has always been (and continues to be) set at 100% deductible.
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Transportation to a Meal

Transportation to/from a restaurant for a client business meal is 100% deductible.
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Meal as Compensation

There is a 100% deduction for meals that are included as taxable compensation to employees and/or independent contractors.
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Food Provided at a Seminar

Food offered to the public for free (such as at a seminar) is 100% deductible.

50% Deductible

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Client Business Meal

The situation for the meal should be considered ordinary and necessary in carrying on business. The taxpayer must be present. The meal must be provided to a current or potential client or consultant. The meal can't be lavish or extravagant.
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Meal During a Meeting

Meals in the office during meetings of employees, stockholders, agents, or directors is 50% deductible.
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Travel Meals

You can deduct 50% of the cost of meals consumed during business travel.
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If you or your employees dine while attending a seminar, conference, or at a business league event, you can deduct 50% of the cost of the meal.
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Meal During Entertainment*

There is a 50% deduction if the charges for the meal are stated separately from the cost of entertainment; no deduction otherwise.

Generally, the entertainment is not deductible. See next section.
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Employer Convenience

When more than half of the employees of the business are on premises and given a meal for the convenience of the employer, there is a 50% deduction.

This deduction is set to expire in 2025.
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Occasional Employee Meal

Meals provided to employees occasionally and overtime employee meals are 50% deductible for a few more years.

This deduction is set to expire in 2025.
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Water, coffee and snacks at the office are 50% deductible.

This deduction is set to expire in 2025.

You can see three of the icons above are colored yellow – these indicate soon-to-expire deductions. Current legislation will eliminate business meals/food provided for the convenience of the employer beginning in 2025.

Not Deductible in 2023

The TCJA legislation eliminated deductions for entertainment expenses. Entertainment venues include night clubs, cocktail lounges, theaters, country clubs, golf and athletic clubs, sporting events, and hunting/fishing, vacations, and similar trips.

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Entertainment Events*

There is no deduction for tickets to an event, transportation, or parking.

You can deduct 50% of a meal at the event if the cost is stated separately.
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Club Memberships

There is no deduction for club dues or for the cost of meals incurrend during a club meeting.

*Taxpayers must use caution when purchasing a meal during the course of an entertainment event. The meal should not be “part” of the entertainment. For instance, if you reserve a suite at a ball game and provide food for the suite, to get the deduction for the food, the invoice must state the cost of the suite and the cost of the food as separate line items. 

Track Your Meal Expenses

In order to take these deductions, you must maintain documentation of your meals. These are the details you need to keep:

  • The amount of the expenditure (including tax and tip).
  • The date, time, and place of the expenditure.
  • A list of who attended the meeting along with their title(s) and business name(s).
  • An explanation of the purpose of the business discussion.

Keep a file with your receipts and these details organized and separate from non-deductible expenses. Your CPA does not necessarily need to see these receipts, but YOU need to keep them to backup your expenses in the case of an IRS audit.  You can provide your CPA with the total amount for the year.

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Taylor Clinkenbeard, CPA

Taylor is a Strategic Analyst in our tax and client accounting services teams.  She has developed specific expertise in software, accounting processes, and tax laws to serve our clients.

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