Are Business Meals Still Deductible? IRS Issues New Guidance

Since the passing of the tax reform bill last December, some confusion has arisen as to how reimbursement for business meals should be treated.

The Tax Cuts and Jobs Act “generally disallows a deduction for expenses with respect to entertainment, amusement, or recreation.” This provision has raised questions about business meals, such as whether the expense of the meals can still be reimbursed on a tax-free basis, whether method of payment is a factor, and others.

In response, the IRS has issued clarification stating that business meals are still deductible, and that the rules for deducting meals have not changed unless the meal occurs in the context of entertainment activities such as sporting events, theater productions, vacation trips, etc.

For more information, read the full IRS Notice (2018-76) here.

This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.


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