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SFR Client Update: New IRS Rules for Meal Deductions

  • Jana
  • Sep 8, 2025
  • 2 min read

Dear Clients,

Big changes are coming to how meal expenses are handled for tax purposes. Congress recently passed the One Big Beautiful Bill (OB3), and we want to make sure you’re aware of how it affects your business deductions.

Here’s what you need to know:


What Stays Deductible:


100% Deductible (Great News for 2025 & 2026!)

  • Meals with clients, customers, or associates: as long as they’re from a restaurant and not lavish.

  • Travel meals: when you’re away overnight for business.

  • Conference and seminar meals: if not included in your registration fee.


Always 100% Deductible (No Change)

  • Company parties, holiday gatherings, and recreational events for employees.

  • Meals provided to the public (like food at a launch or promotional event).

  • Meals that are treated as employee compensation (and included in wages).

  • Meals billed directly to a customer.


What Changes in 2026


Starting in 2026, the IRS is tightening the rules:

  • Office snacks and coffee = No longer deductible.

  • On-site catered meals (like staff lunches) = No longer deductible, unless treated as taxable wages.

  • Company cafeterias = No longer deductible.

  • Small food perks (de minimis snacks) = No longer deductible.


What This Means for You

  • Through 2025 and 2026, you’ll enjoy a temporary upgrade, most meals that used to be 50% deductible will be 100% deductible if they meet the IRS criteria.

  • Starting January 1, 2026, deductions get stricter, especially for office-provided food and snacks.


Our Recommendation

  • Save every receipt: including details on who attended and the business purpose.

  • Check your source: make sure meals are from qualifying restaurants when possible.

  • Plan ahead for 2026: consider how much your business spends on in-office meals/snacks and whether those budgets may shift.


SFR is Here to Help

We’re updating your QuickBooks categories and internal coding rules so your expenses are tracked correctly. If you have questions about how these changes affect your business, or want to review your 2026 budget planning our team is ready to guide you.


Contact us if you’d like a personalized review of your meal expenses and tax strategy.


Together, we’ll make sure you get every deduction you’re entitled to—without leaving money on the table.

 
 
 
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