Business meals and entertainment deductions continue to cause confusion—especially with recent updates under IRC Section 274 (as modified by the One Big Beautiful Bill Act). Here’s a quick, easy-to-understand summary for business owners:

What’s Still Deductible

50% Deductible

• Meals with clients or prospects (with a clear business purpose)
• Employee travel meals
• Meals during business meetings or conferences
• Separately stated meals at entertainment events

100% Deductible

• Employee holiday parties and company-wide events
• Meals treated as taxable wages to employees

What’s NOT Deductible

• Entertainment expenses (sporting events, golf outings, concerts, etc.)
• The entertainment portion of bundled event tickets
• Starting in 2026: employee snacks, breakroom food, and meals provided for the employer’s convenience

Important Change for 2026

Beginning in 2026, everyday employee snacks and on-site meals provided for operational convenience will no longer be deductible. If your business provides regular food perks, this may impact your tax planning.

Smart Recordkeeping Matters

To support your deduction:

• Keep receipts
• Document who attended
• Note the business purpose
• Separate meals from entertainment when possible

We recommend reviewing your meal and entertainment policies and updating them as needed to comply with the new rules.