Business meals-100% Deductible?

[Allan]

My understanding is business meals are 50% deductible. I was recently told that business meals with direct employees are 100% deductible. I am prepping for my company tax return, I am getting conflicting information from 2 CPA's.

Allan

[jebmke]

I would look at Schedule C instructions for initial guidance. IRS documents is normally my first stop.

https://www.irs.gov/pub/irs-pdf/i1040sc.pdf

Edited to correct wrong link

[MP123]

One of the COVID-era recovery bills temporarily increased the deduction to 100% for a year or two, to help restaurants, but it's generally back to 50% now for most business meals.

[Allan]

One of the COVID-era recovery bills temporarily increased the deduction to 100% for a year or two, to help restaurants, but it's generally back to 50% now for most business meals.

Thank you

[JBTX]

I know a CPA that said if you can characterize the activity as morale building etc it can be 100% deductible.

[yankees60]

I always first go the relevant IRS publication to get a first answer.

Go here and you will find far more than what I am putting here:

https://www.irs.gov/publications/p15b#e ... 1000193706

Meals
This section discusses the exclusion rules that apply to de minimis meals and meals on your business premises.

De Minimis Meals
You can exclude any occasional meal you provide to an employee if it has so little value (taking into account how frequently you provide meals to your employees) that accounting for it would be unreasonable or administratively impracticable. The exclusion applies, for example, to the following items.

Coffee, doughnuts, or soft drinks.
Occasional meals or meal money provided to enable an employee to work overtime. However, the exclusion doesn't apply to meal money figured on the basis of hours worked (for example, $2.00 per hour for each hour over 8 hours), or meals or meal money provided on a regular or routine basis.
Occasional parties or picnics for employees and their guests.
Employee. For this exclusion, treat any recipient of a de minimis meal as an employee.


Meals on Your Business Premises
You can exclude the value of meals you furnish to an employee from the employee's wages if they meet the following tests.

They are furnished on your business premises.
They are furnished for your convenience.
If you allow your employee to choose to receive additional pay instead of meals, then the meals, if chosen, aren’t excluded. The exclusion also doesn't apply to cash allowances for meals.

On your business premises. Generally, for this exclusion, the employee's place of work is your business premises.
For your convenience. Whether you furnish meals for your convenience as an employer depends on all the facts and circumstances. You furnish the meals to your employee for your convenience if you do this for a substantial business reason other than to provide the employee with additional pay. This is true even if a law or an employment contract provides that the meals are furnished as pay. However, a written statement that the meals are furnished for your convenience isn't sufficient.
Meals excluded for all employees if excluded for more than half. If more than half of your employees who are furnished meals on your business premises are furnished the meals for your convenience, you can treat all meals you furnish to employees on your business premises as furnished for your convenience.