Company dining rooms, employee cafeterias and other “eating facilities” operated by an employer for employees are not subject to the 50% limit on business meal deductions if the facility: is located on the business premises of the employer, brings in revenue that normally equals or exceeds its direct operating costs and does not discriminate in favor of highly compensated employees.

Specific Details

The taxpayer reduced their taxable income by $5,000 by deducting 100% of business meals. Since the taxpayers income was taxed at the 30% tax bracket, the income reduction may decrease their income taxes by $1,500 ($5,000 x 30%).

Potential Savings

If you are in a combined (federal, self-employment, and state) tax bracket of 30%, you could reduce your taxes up to $300 for every $1,000 of income reduction by deducting 100% of business meals.