Tax planning is essential to owning and running a successful business. The meals and entertainment tax deduction has been a valuable way for many small business owners to reduce their tax liability each year. Unfortunately, the 2023 meal deduction rates will be cut in half from the 2022 deduction rate.
Read on as we share our dining and entertainment deals for 2023. This information can help you take advantage of this valuable tax credit that will save you money. Some of you reading this are giving up your office space and are holding a lot of meetings in restaurants.
The amount of food and entertainment tax has changed in recent years. With the passage of the Tax Cuts and Jobs Act of 2018 (TCJA), also known as the Trump Tax Plan, you cannot deduct entertainment expenses. Whether you want to entertain sporting events or take your clients to Broadway shows, there's no extra charge for tickets.
There are other ways to deduct some of the expenses that qualify for the Meals and Entertainment Tax Credit.
2023 discounts on dining and entertainment
It would make more sense to discuss what else can be deducted from the food and entertainment tax credit in 2023. Here are some possible tax deductions, which can be half or full.
· Business lunch with clients (50%)
Office food (50%)
Eat at work (50%)
Dinner at the Congress (50%)
Catering for company parties (100%)
Offer food and drink to the community (100%)
Overtime dinner at the office (100% )
Your guide to cutting back on food in 2023
By 2023, most business meals are only 50% deductible under IRS rules. Let's say you're taking your favorite client out to a nice dinner (to discuss business); The price of food can be halved. On the other hand, if you go out to eat with a client without business, the meal is not deductible.
Adding to the confusion is the fact that 100 percent of food has been cut in 2021 and 2022. This was a temporary change to increase costs in restaurants during the COVID pandemic.
