Your Business: New Rules for Writing Off Restaurant Meals

A provision in the December 2020 stimulus bill allows businesses to deduct the full cost of food and beverages provided by a restaurant in tax years 2021 and 2022. The standard deduction for most business meals had been limited to 50% of the cost since the Tax Cuts and Jobs Act took effect in 2018.

Offering a 100% deduction for business meals incentivizes spending at restaurants, an industry that was hit hard by the pandemic. The full deduction is available for take-out meals as well as those served at eating establishments.

What Counts as Business Meals?

Meals can be deducted as a business expense if they are associated with the active conduct of a trade or business. This applies to meals for business associates such as current or potential clients, customers, consultants, vendors, and employees, whether they are consumed locally or while traveling.

To qualify for a deduction, there must be a business purpose for the meal, or a substantial business discussion must take place before, during, or after the meal. The taxpayer — or an employee of the taxpayer — must be present, and the cost of food or beverages must not be lavish or extravagant.

Entertainment Is Excluded

The Tax Cuts and Jobs Act eliminated the deduction for entertainment expenses — such as golf outings, cruises, concerts, and sporting events — starting in tax year 2018. Business meals that are provided for clients before, during, or after entertainment events are still deductible, but food and beverage costs must be stated separately from any nondeductible costs (such as tickets or facility charges) on the invoice. The IRS has also warned that the amount charged for food and beverages may not be inflated to circumvent the entertainment disallowance.

There is an exception for recreational or social activities that primarily benefit employees. For example, employers can fully deduct expenses for both meals and activities at a company event such as a summer picnic or a holiday party.

Document Your Expenses

The IRS tends to scrutinize food and beverage deductions closely. If they are challenged, your expenses could be disallowed unless you have books and records that satisfy certain statutory and regulatory requirements. Make sure to keep all itemized invoices and credit-card receipts, as well as notes with the date, amount paid, restaurant name, attendees, and business purpose for each occasion.

Solon Financial Group
6200 SOM Center Rd. B21 Solon, OH 44139
Phone: (440) 519-1838, (866) 517-7302 Fax: (440) 519-1878

Securities and advisory services offered through Cetera Advisors LLC, member FINRA, SIPC. Cetera is under separate ownership from any other named entity.

6200 SOM Center Rd, B21, Solon, OH 44139

Securities and advisory services offered through Registered Representatives of Cetera Advisors LLC (doing insurance business in CA as CFGA Insurance Agency LLC), member FINRA/SIPC, a broker/dealer and a Registered Investment Advisor.  Cetera is under separate ownership from any other named entity.

Individuals affiliated with this broker/dealer firm are either Registered Representatives who offer only brokerage services and receive transaction-based compensation (commissions), Investment Adviser Representatives who offer only investment advisory services and receive fees based on assets, or both Registered Representatives and Investment Adviser Representatives, who can offer both types of services.

This site is published for residents of the United States only. Registered Representatives of Cetera Advisors LLC may only conduct business with residents of the states and/or jurisdictions in which they are properly registered. Not all of the products and services referenced on this site may be available in every state and through every advisor listed. For additional information please contact the advisor(s) listed on the site, visit the Cetera Advisors LLC site at


The registered representative(s) and/or investment adviser representative(s) listed on this website are licensed and registered in the following states:

We are licensed to sell Insurance Products in OH,PA.

[ Online Privacy Policy | Important Disclosures | Business Continuity | Privacy Promise | Order Routing Disclosure | Cetera Advisors ]