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We want to make sure you are aware of an important update regarding meals and entertainment deductions. As of 2026, several long-standing business tax deductions related to employer-provided meals and snacks will be significantly reduced or eliminated under the "One Big Beautiful Bill Act".
How do you know what is deductible for 2026?
The short answer is that it depends. Exactly what is deductible, and to what extent, depends entirely on the circumstances involved. Below are some general guidelines to consider.
100% Deductible
- Food for recreational employee events, such as holiday parties, summer picnics, or team-building events.
- Food provided to the public to promote goodwill (e.g., snacks or coffee for customers).
- Food for events in support of a charitable cause.
- Meals that are an essential part of your business function (for example, if you are a food critic or food blogger).
- Meals included as taxable compensation to employees or independent contractors.
- Meals sold to a client or customer.
50% Deductible
- Business meals.
- Meals while traveling for work.
- Meals at a conference.
Not Deductible
- Entertainment
- Meals provided to the employees for the convenience of the employer (e.g., dinner for employees who work late at the office).
- Meals provided in-office for meetings of employees, stockholders, agents, or directors.
- Employee meals at a company cafeteria if the annual revenue of the facility is equal to or greater than the costs.
- Food items, such as soda, coffee, or snacks, for employees.
Businesses should review the special recordkeeping rules that apply to business meals. Well organized records make it easier to prepare a tax return. Keep records, such as receipts, canceled checks, and other documents that support a deduction.
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