Hey, you know what's important when it comes to taxes? Deductions. And when it comes to deductions, one of the more common ones is meals. You know, food, sustenance, social libation, the good stuff. But there's a lot of confusion out there about how you can deduct meals under the current tax regime, so let me break it down for you.
First off, if you're a business owner, you can deduct 50% of your meal expenses if they're business-related. That means you gotta be there (or one of your employees) and there's gotta be a good reason for the meal. Like, you're meeting with a client, or you're trying to get a new contract, or you're actually doing work during the meal, that kind of thing.
Now, the cost of the meal has to be reasonable, too. If you're taking somebody out for dinner at a fancy steakhouse and dropping a grand, the IRS may want to peek at something like that to make sure it's kosher. But if it's a reasonable amount, you're good to go.
Here's the thing, though: you can't just claim meals willy-nilly. You need to keep records of what you spent, who you were with, and why you were there. And that means keeping receipts. But don't worry, you don't have to keep every single crumpled-up piece of paper in your wallet. Take a pic of your receipt. There are apps and software out there that make it easy to upload the pic, provide context and keep everything organized (www.hubdoc.com and www.dext.com do this).
Now, the old 2022 'deduct 100% at restaurants' thing is no longer happening. There are, however, some situations where you can deduct 100% of your meal expenses. Like if you're traveling for work and the meal is included in your travel expenses, or if you're hosting a company party or a fundraising event.
And, as a business owner, if you provide meals to your employees, that can be deducted 100% but it's important to remember that it's considered taxable income to your employees, so you'll need to report it on their W-2s (might want to make this policy clear if you go this route).
Finally, there's a flat rate method (aka per diem method, more info at www.gsa.gov) you can use to deduct meals without having to keep receipts for every single one. There are limits and rules you need to follow, so make sure you do your research.
So there you have it, folks. Deducting meals isn't too complicated and can be a great way to save on your taxes, but you gotta make sure you're doing it right. Keep good records, know the rules, and don't go too crazy with the lobster and caviar. And remember, when it comes to taxes, it's always better to be safe than sorry. Now go out there and get yourself a good meal, but make sure it's for business!"