Date: June 10, 2022
Are you maximizing the NEW meals and entertainment deductions?
As a business owner, you’re probably familiar with how difficult it is to keep up with the ever-changing rules and updates that the IRS makes. You also know the importance of spending every dollar wisely and taking advantage of any savings available to you. Under the Consolidated Appropriations Act, the amount allowed for business meal deductions has doubled temporarily, through December 31st, 2022.
In order to help restaurants that have been struggling due to COVID, under the act, you can take a client out to a restaurant as long as there is a business purpose behind that meal. There are some requirements to allow for the business meal deduction:
- The expense isn’t lavish or extravagant under the circumstances (think ordinary and necessary)
- The taxpayer (or employee of the taxpayer) is present at the furnishing of such food or beverage.
It is also important to be aware of what the IRS defines as a ‘restaurant’, in this case, the definition includes a ‘business that prepares and sells food or beverages to retail customers for immediate consumption (regardless of whether the food or beverages are consumed on the business’s premises)’. It does not include a business that sells primarily pre-packaged food or beverages (for example, grocery stores, liquor or drug stores, convenience stores, etc.)
The Meals and Entertainment deduction is just one of hundreds of tax strategies available to legally save you money on your tax bill. You may have an accountant that handles your monthly books already, however, they most likely are not doing strategic work to save you money and guiding you on how to maximize your savings opportunities. A Tax Strategist can help you make sure that you are leveraging the tax strategies available to you to help reduce or eliminate your tax obligations (legally). This means more money in your pocket – so that you can reinvest in your business, team, and give back to your community.
There are multiple combinations, and an expert will help find the best fit for your personal and business situation. If you don’t have a tax plan in place now and think you could benefit from it, feel free to contact one of our Tax Strategists here for a complimentary assessment.