100% Deductions for 2021 and 2022
Typically expenses for meals are limited to a 50% deduction. However as part of Covid recovery, the IRS is allowing a 100% deduction for certain meals and beverages expenses during the the calendar years 2021 and 2022.
Which restaurants qualify?
Only restaurants that provide food and beverages for immediate consumption would qualify. You are allowed to carry out the food from such restaurants. However, a qualifying restaurant does not include a business that primarily sells pre-packaged food or beverages not for immediate consumption, such as a grocery store; specialty food store; beer, wine, or liquor store; drug store; convenience store; newsstand; or a vending machine or kiosk.
What about Entertainment?
Generally, entertainment, amusement, or recreation are not allowable deductions. The temporary 100% deduction for certain meals and beverages does not change the entertainment deductions. However, meals and beverages at an entertainment event are typically deductible if they are separately billed from the cost of the entertainment. As result, the 100% deduction can apply to meals and beverages if provided for immediate consumption.