Most of the small business owners know business meal is only 50% tax deductible.
Is there any exception to deduct 100%?
The answer is YES. I am going to share one of the exceptions with you today.
Dinner for Employee During Overtime
If you offer dinner occasionally to employees who stay late for overtime, you can deduct the meal 100% instead of 50%.
Rules
As long as it is not a regular written company policy, that fulfills the requirement of the term of occasionally.
Also, the meal, with a reasonable coat, is enable the employee to work overtime. Ideally, the meal can be purchased and provided in the period of overtime.
The meal cost should not be proportional to the overtime hours. It should be flat cost so that it will not be treated as additional compensation.
Can Owner Enjoy it too?
Yes, this rule applies for owner who serves as employee. However, please be sure to offer this to other employees as well to avoid discrimination.
Bookkeeping
You and your team deserve this tax break during overtime. Please communicate with your bookkeeper to records such overtime meal separate from meal and entertainment which is 50% tax deductible only.
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