The most current information for 2021 meal and entertainment deduction for tax returns is available here.
On October 3, the IRS issued a new guidance that will allow a deduction for 50% of meals while entertaining clients/customers. This decision was made following confusion over the wording in the tax law regarding meal write-offs. The current language was unclear to many professionals as to whether the benefit was completely eliminated, or not.
The new preliminary guidance from the IRS (to be formalized later) says that the costs of business meals while entertaining clients are still deductible as long as they’re reflected on a separate receipt.
“Food and beverages that are provided during entertainment events will not be considered entertainment if purchased separately from the event,” the IRS said in a statement. For example, a meal purchased after a round of golf could be deducted. However, tickets to a box to view a sporting event that includes food and drink would not be eligible for the tax break.
For questions or concerns about the entertainment deduction, new tax code and its applicability, feel free to reach out to a K·Coe Isom tax advisor.