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Are business meals still deductible?

A client texted me last week to ask if business meals are still deductible. It’s a good question given all of the confusion around last December’s tax reform. The short answer is: yes, business meals are still deductible.

The confusion comes from a change made in the Tax Cuts & Jobs Act that does away with business-related deductions for entertainment. Golf outings, tickets to a ball game or concert, and the like are no longer deductible. What was unclear was whether “entertainment” also included meals. The IRS clarified this in Notice 2018-76 which basically states that the old rules regarding meals still apply.

So if the meal is not extravagant and it is directly related to your trade or business, you can still claim 50% of it as a business expense.


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