Meal and Beverage Expenses Fully Deductible for the Next Two Years

When President Trump signed into law the recently passed stimulus legislation known as the Consolidated Appropriations Act (Act), most discussion and concern focused on the Payroll Protection Loan program and whether expenses would be deductible that allowed, or will allow, many taxpayers to receive full forgiveness of their loans. An aspect of the bill that’s largely gone unnoticed, however, is a provision that gives taxpayers the ability to fully deduct the cost of meal and beverage expenses for the next two calendar years, beginning January 1, 2021.

The Act adds an exception to the 50 percent limitation of the deductibility of business-related food and beverage expenses, stating specifically that the limitation shall not apply to such expense for food or beverages provided by a restaurant if paid for or incurred after December 31, 2020 or before January 1, 2023.

What’s unclear is the definition of restaurant. It’s uncertain, for instance, whether purchase of food at a sporting event will be eligible for the full deduction. Hopefully the IRS will provide additional guidance on the matter. It would be in the best interest if this definition is as broad as possible, since this part of the Act is clearly aimed at providing an incentive to resume meal and beverage business expense activity and provide a much-needed boost to the struggling hospitality industry.   We will continue to monitor guidance as it becomes available.

Please consult your Schneider Downs tax consultant if you have additional questions or would like to discuss this topic in further detail.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2021 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on

Timely Tax Opportunities: Eight Immediate Considerations from the Consolidated Appropriations Act
A Privilege Tax for Those who Work from Home?
Introducing The Economic Aid Act FAQ Video Series
IRS Updates Guidance for Filing Delinquent International Information Return
Additional Funds Available for Colleges and Universities

Register to receive our weekly newsletter with our most recent columns and insights.

Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

contact us

Map of Pittsburgh Office
Pittsburgh

One PPG Place, Suite 1700
Pittsburgh, PA 15222

contactsd@schneiderdowns.com
p:412.261.3644     f:412.261.4876

Map of Columbus Office
Columbus

65 East State Street, Suite 2000
Columbus, OH 43215

contactsd@schneiderdowns.com
p:614.621.4060     f:614.621.4062

Map of Washington Office
Washington, D.C.

1660 International Drive, Suite 600
McLean, VA 22102