DEDUCTIONS FOR FOOD OR DRINKS FROM RESTAURANTS IN TAX DECLARATION
Starting from January 1, 2021 and until December 31, 2022, companies can claim 100% of their food or beverage expenses paid to restaurants as long as the owner of the company (or an employee of the company) be present when food or beverages are provided, and the total expense is not extravagant as the case may be.
In most prior tax years, there is a 50% limit on the amount that businesses can deduct for food or beverages. The temporary exception was included in the Taxpayer Certainty and Disaster Relief Act of 2020, part of a series of tax laws aimed at providing relief related to the coronavirus.
What are the companies where you can get a 100% deduction when consuming drinks and food?
Under the temporary provision, restaurants include businesses that prepare and sell food or beverages to retail customers for immediate consumption on the premises and / or off the premises. However, restaurants do not include businesses that primarily sell prepackaged products, not for immediate consumption, such as supermarkets and convenience stores.
Additionally, an employer may not treat certain employer-operated eating facilities as restaurants, even if a third party operates these facilities under contract with the employer.
For more information on this and other coronavirus-related tax benefits for business owners, contact the office today.
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