How to use the business meals deduction calculator
US tax law has no revenue-scaled entertainment allowance of the kind used in some other countries, where a company may deduct a fixed base amount plus a percentage of sales. Instead, each category of spending has its own deductible percentage: business meals are generally limited to half, entertainment has been essentially nondeductible since the Tax Cuts and Jobs Act, and a narrow set of food costs stays fully deductible.
Enter what you spent in each category along with the rate that applies to your tax year. The tool multiplies each amount by its rate, adds the fully deductible items at 100%, and shows what is left over as the nondeductible portion. Both rate fields are editable because the percentages are statutory and have changed more than once in recent years.
The last line converts the nondeductible amount into a tax cost using your marginal rate, so you can see what the disallowed spending is really worth. It disappears when everything is deductible. Treat the output as planning information, not a filing figure.
Frequently asked questions
Since the Tax Cuts and Jobs Act, entertainment such as tickets, golf outings and club dues is generally not deductible at all, which is why the entertainment rate in this tool defaults to 0. A meal bought during an entertainment event can still qualify if it is billed separately. Confirm the current treatment with your tax advisor.
A narrow set of costs falls outside the partial limit, such as food provided at a company-wide recreational event, meals sold to customers in the ordinary course of business, and amounts already treated as taxable compensation. Enter those in the fully deductible field so they are not cut in half.
The deductible percentages for meals and entertainment are set by statute and have changed several times in recent years. Hard-coding them would quietly push a stale number into a filing, so the tool asks you to enter the rates that apply to your tax year.