New Tax Act: Meals – What is Deductible?

The Tax Cuts and Jobs Act (the “Act”) is the most significant tax legislation enacted in the last 30 years.  However, this new Tax Act is only temporary.  Most of the new tax rules pertain to the next eight years.  After eight years many of the changes will expire on December 31, 2025.  When these new tax rules expire, the old tax rules which were in effect in 2017 will return, which can be very complicated for tax planning purposes!

One of the most often asked question relates to deductible business meals.  For business meal expenses, generally the Act has not changed the deductibility - business meals are still 50% deductible.  The only change is that, starting in 2018, the 50% deductibility for business meals has expanded to include meals provided through an in-house cafeteria or otherwise on the premises of the employer.  Previously, these in-house meals were 100% deductible; now they are only 50% deductible.  All business meals are 50% deductible.