The tax code limits most of your business meal deductions to 50 percent of the amounts you spend.
As you likely know, you avoid the 50 percent cut and deduct 100 percent of the meal costs when such costs are incurred for
an employee party (see Make Your Company Party More Fun: Find Thousands More in Legal Tax Deductions!),
a special sporting event to benefit charity (see Business Tax Deduction for Golfers and Spectators and Tax Deductions for Shotgun and Partying at Charity Skeet Shoot),
required employee meetings on your business premises (see Increase Tax Deductions for Business Meals at Employee Meetings), or
a “show and tell and try to sell” group sales presentation.
In a new precedent-setting case, you may find new opportunities for making meals 100 percent deductible (which they were before the 1986 Tax Reform Act).
For this new precedent, say thanks to Jeremy and Margaret Jacobs. They own the Boston Bruins, paid for staff meals while the team was out of town for hockey games, and deducted 100 percent of the meal costs on their tax returns.
The IRS said the 50 percent limitation applied, but the Tax Court ruled against the IRS, and the Jacobses won their 100 percent deduction—setting the stage for us.
We’ll explain this decision and how you might be able to rely on it to deduct 100 percent of your employee meals, too. ... Log in to view full article.