OBBB Strategy: Reclassify Meals from Earlier in 2025

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.”