Last week, the Treasury Department and the IRS issued notice of a temporary exception to the 50% limit on the amount that businesses may deduct for meals. Beginning on January 1, 2021 through December 31, 2022, businesses can claim 100% of their food and beverage expenses paid to restaurants, provided the business’s owner or one of its employees is present when food or beverages are served, and the expense is not lavish or extravagant under the circumstances. Note that restaurants do not include businesses that primarily sell pre-packaged goods not for immediate consumption, such as grocery stores and convenience stores.
Killingsworth Spencer, LLC is a great resource for those who own businesses and may not know best financial practices. You might recognize a fellow entrepreneur at a business lunch ordering water and quickly asking for the bill before the server offers dessert. Tell him that martinis and crème brulee are fully deductible, and then about Killingsworth Spencer. We keep our clients abreast of pertinent tax information.