The Consolidated Appropriations Act included several new relief packages for individuals and businesses. As we dissect the current bill, YHB is producing a series of in-depth analysis on the bill to help you take advantage of the bill. In this article, we will explore the new rules involving meal deductions.
The new bill has a temporary provision that allows a 100 percent deduction for meals for any meal expenses incurred after December 31, 2020 through December 31, 2022. For example, if on January 1, 2020 a company takes client out for a New Year’s Day meal, the company can now deduct 100 percent of the meal instead of 50 percent.
The inclusion of this provision is meant to help spur businesses to buy meals in order to help the restaurant industry.
For this period, it will be important for businesses to make sure they are accounting for meals and entertainment separately in their chart of accounts. Entertainment expenses are still non-deductible during this time period, so separating out these expenses on your trial balance will make it easier to identify what is and what is not deductible between these commonly co-mingled expenses.
Should you have any questions, contact a YHB advisor today!
Additional articles in this series:
- Congress Passes New Stimulus Bill
- Overview of Second Round of PPP Funds
- New Rules Relating to PPP Loan Forgiveness
- Employment Credit for Schedule C Businesses
- Additional Payroll Help from the New Stimulus Bill
- Change for Residential Rental Property Depreciation
- 2020 Tax Extenders