Salons, most of your meal expenses that are being deducted at 50% will not be deductible at all, starting 01.01.2026!
100% Deductible
- Staff holiday parties, picnics, and social events open to all employees
- Meals treated as taxable compensation and added to employees’ W-2
- Meals sold to general public or provided during public promotional events
- Meals sold to employees in bona fide transactions (i.e. restaurant employees)
50% Deductible
- Meals with clients or prospects with a clear business purpose
- Meals for an employee traveling away from home on business
- Meals at a restaurant provided other requirements are met (i.e. an owner meeting with a business purpose, not lavish, etc.)
Not Deductible
- Meals provided on the employer’s premises for employer’s convenience (including staff meetings)
- Meals that are a general workplace perk (i.e. breakroom snacks)
- Staff birthday or reward items
- Meals provided as de minimis fringe benefits
Please Note
- Most salons have accounts called Meals 100% and Meals 50%. A new, non-deductible account will need to be added and these items will have to be coded appropriately