100% meals deduction is back for 2021
A 100% business meals deduction is here for 2021. For the longest time, business meals, when deductible, were only deductible at 50% of the total spent. The theory behind this was that since the IRS assumed that meals deductions were being overstated on a regular basis by just about everyone, why not just cut the deduction in half? But for 2021, certain business meals will be fully deductible. The theory for this change is to stimulate restaurant business after the “shutdown.”
There are some catches, though. It has to be at a restaurant, the business owner must be present, and it can’t be lavish or extravagant. And the deduction disappears after December 31, 2022.
But at least for another year, some business meals will not have to be limited to the 50% limitation rule.