Every industry has its own nuances. We take that into consideration and approach business solutions with the specific lens required of your field. Our teams are comprised of talent with relevant experience and we’re prepared to meet every challenge.
CMS Rural Health Transformation Program: Missed Year 1 funding? How to prepare for Year 2 opportunities
Lorem ipsum dolor set
FSG Quarterly Financial Services Update - Q3 2026
Lorem ipsum dolor set
Replay: Financial Services Group Quarterly Accounting and Reporting Update
Lorem ipsum dolor set
Workforce Development: Addressing physician burnout through a holistic operating model
Lorem ipsum dolor set
What ESOP sellers need to know about Section 1042 rollovers
Lorem ipsum dolor set
The One Big Beautiful Bill Act (OBBBA) brings new rules for meals and entertainment deductions beginning in tax years after December 31, 2025. While the categories haven’t changed much, the deductibility rules have. For business owners, this means far fewer employer provided meals will qualify. Only a limited set of specific situations will still allow a deduction under the new law.
At a Glance
Entertainment costs stay nondeductible (with only a few narrow exceptions).
Business meals remain 50% deductible, but you still need proper documentation and a clear business purpose.
Employer-provided meals become mostly nondeductible, including snacks, coffee, overtime meals, and meals served in on-site cafeterias. Exceptions include:
Meals provided by restaurants to their employees
Meals on fishing vessels
Meals sold to the public at full price in employer-operated cafeterias
Below is a table summarizing the changes:
Action Steps for Employers
Since the OBBBA significantly limits the deductibility of employer-provided meals, most businesses will need to make some operational and accounting adjustments. As you prepare for the 2026 tax year, consider the following:
Review how your company currently provides meals and snacks. Identify where food is being offered (e.g., break rooms, cafeterias, meetings, overtime support) and determine which items will no longer be deductible.
Update internal policies and communication. Employees may need clarity on what qualifies as a business meal going forward. Simple updates to handbooks, expense policies, or manager guidance can prevent confusion.
Adjust your accounting and tax processes. You may need new general ledger categories, revised tracking procedures, and updated tax provision and return calculations to reflect the new limitations.
Evaluate operational and financial impact. For companies with cafeterias or regular meal offerings, it may be worth assessing costs, pricing, and whether changes to operations make sense under the new rules.
We Can Help
The Elliott Davis team helps business owners adapt to the new tax requirements and the strategic decisions that follow. We can assist with policy updates, recordkeeping, and planning so you’re well prepared for the 2026 tax year. Contact us to discuss how these changes may affect your business and what steps to take next.
The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.
High overhead, declining shareholder value: Helping a healthcare organization improve the bottom line
This case study explores effective strategies for overcoming financial and operational challenges in healthcare.
December 9, 2024
Mastering cash flow: Essential tips for construction companies – Part 1
Elliott Davis shares strategies and a framework for managing cash flow in the construction industry
November 26, 2024
Federal Financial Institutions Examination Council announces two significant changes
The FFIEC has updated its IT examination guidelines, expanding the Development, Acquisition, and Maintenance (DA&M) booklet and retiring the Cybersecurity Assessment Tool (CAT) by August 31, 2025. Financial institutions must now enhance IT risk management and adopt alternative cybersecurity frameworks like NIST 2.0 and CISA Cybersecurity Performance Goals to stay compliant.
November 21, 2024
Tax Alert – Tax relief for Section 1031 exchanges in the aftermath of Hurricane Helene
The IRS has extended tax deadlines to May 1, 2025, for individuals and businesses in areas affected by Hurricane Helene, including Alabama, Georgia, North Carolina, South Carolina, and parts of Florida, Tennessee, and Virginia. This relief provides significant benefits for real estate investors completing Section 1031 exchanges, offering extended deadlines for identifying and purchasing replacement properties.
October 28, 2024
BSA/AML/CFT Roundtable Webinar Replay
October 15, 2024
Port strike strains supply chain
A tentative agreement between the International Longshoremen's Association (ILA) and the US Maritime Alliance (USMX) ended a two-day strike, averting a potential $5 billion economic impact. While supply chain disruptions were minimal, this event underscores the importance of proactive risk management, inventory buffers, and diversified logistics strategies to mitigate future disruptions.