Beginning January 1, 2023, meal and entertainment deductions will revert to tax rules under Tax Cuts and Jobs Act (TCJA). These deductions temporarily changed for tax year 2021 and 2022 with the passing of the Consolidated Appropriations Act of 2021. For tax year 2023, many of the meal and entertainment deductions reduce from 100% deductibility to 50% deductibility. Changes in 2023 include:
- Client Business Meals: 50% deductible if ordinary and necessary in carrying on business, taxpayer is present, provided to current or potential client or consultant and not lavish or extravagant
- Entertainment Related Meals: 50% deductible if charges are stated separately from the cost of entertainment, no deduction otherwise
- Meals Provided for the Convenience of Employer: 50% deductible
- Meals Provided to Employees Occasionally and Overtime Employee meals: 50% deductible
- Meals in Office during meetings of employees, stockholders, agents or directors: 50% deductible
- Meals During Business Travel: 50% deductible
Barring further action by Congress, many of the TCJA rules are scheduled to expire after 2025 and some may revert to tax rules that were effective in 2017. To learn more, review our chart of meal + entertainment deductions by category and tax year.
