The Consolidated Appropriations Act of 2021 (the “Act”) temporarily increased the allowable tax deduction for certain business meals from 50 percent to 100 percent. Taxpayers have been able to benefit from this increased tax deduction for 2021 and 2022. After December 31, 2022, the allowable tax deduction for all business meals will revert back to the 50 percent limitation that was in existence prior to the Act.
While it is possible that Congress could pass an extension of the 100 percent deduction, as of now, taxpayers should plan to have their tax deduction for all business meals limited to 50 percent beginning January 1, 2023.
