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Special analysis: Business meals deduction

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Alice Gilman

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in Centerpiece,Office Management,Payroll Management

Tech companies provide free on-site gourmet meals to their employees because they want to keep them “engaged.” Engaged employees, the argument goes, are more productive. Well, maybe. But that caught the attention of the IRS several years ago, and it promised to act on these so-called convenience meals.

The Tax Cuts and Jobs Act’s extension of the 50% corporate deduction limit to convenience meals shines a new light on these meals and has allowed the IRS to refine its previous guidance. (AM 2018-004, 10-23-18)

Convenience meals 

Under tax code Section 119, you may provide meals tax free to employees if you have a substantial non-compensatory reason for doing so (i.e., the meals are provided for your convenience) and the meals are provided on your premises. Short meal periods that are necessitated by the business or meals provided to employees so they’ll be available for emergencies are two standard examples of con...(register to read more)

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