If your books have already been categorizing all meals at 50% deductible, you need to go back and reclassify eligible restaurant meals from January 1, 2025 onward as 100% deductible.
Applicable dates: Expenses paid or incurred between Jan 1, 2025 and Dec 31, 2026
Action step for bookkeepers: Review all 2025 meals YTD
Look for vendors that are restaurants (including Uber Eats, DoorDash, etc.)
Confirm that meals meet standard business expense tests
Update chart of accounts/tags so restaurant meals hit a 100% deduction bucket
Tax Planning Opportunities
Frontload Meals in 2026
Since the deduction expires Dec 31, 2026, consider scheduling client lunches, team dinners, or prospect meetings before year-end 2026.
Buy gift cards to restaurants in 2026 if business purpose is clear and deductible that year.
Reevaluate In-House Meals vs. Restaurant Catering
Food purchased from grocery stores or brought in-house is still only 50% deductible.
But if you order meals from a qualifying restaurant (even for internal meetings), that’s now 100% deductible.
Example: Ordering Chipotle for a team training = 100% deductible. Buying sandwich trays from Costco = 50% deductible.
Use Hedgi AI to Automate Classification
Accurate tagging matters. Hedgi can now flag meals from restaurants (e.g., Yelp-matched vendors, POS integrations) and apply the 100% logic automatically.
Helpful for CPAs doing year-end reviews.
Reminders from the Law (Section 70421):
The bill amends IRC §274(n)(2)(D), stating:
“...for amounts paid or incurred after December 31, 2024, and before January 1, 2027, the full amount of the expense for food or beverages provided by a restaurant shall be deductible.”