What Small Business Owners Need to Know About the 2026 Meal Deduction Changes

Hello it's Your Bookkeeper Rebekah! Here to talk about some not so fun changes coming!! Owning a small business, chances are you’ve taken advantage of meal deductions — whether for business travel, client lunches, or even the occasional coffee bar in your office. But starting in 2026, the tax rules around meal deductions are changing, and these changes could affect your bottom line.

Here’s a breakdown of what’s coming, and how you can prepare.

What’s Changing in 2026?

The Tax Cuts and Jobs Act (TCJA) of 2017 put some meal deduction rules on a countdown clock. Unless Congress steps in, here’s what will happen in 2026:

• No more deductions for employer-provided meals on premises.

  Free staff lunches, snacks, coffee, or even meals provided for the “convenience of the employer” (like feeding staff who are working late) will become nondeductible.

• De minimis food perks lose their deduction.

  That candy jar at reception, Friday donuts, or break-room coffee? Currently partially deductible, but starting in 2026 those costs can’t be written off.

• Business meals remain deductible — at 50%.

  Client lunches, team meals while traveling, and food tied directly to business activity are still deductible, but capped at 50%.

  Example: Take a client to lunch to discuss a contract? Still 50% deductible.

• Employee events stay fully deductible.

  Annual holiday parties, summer picnics, or similar events open to all employees remain 100% deductible.

  

Why This Matters for Small Businesses

Unlike large corporations, small businesses feel these deductions more directly. A few examples:

• A local construction company that regularly feeds crews working long shifts will lose that write-off.

• A boutique law firm that keeps snacks and coffee stocked for staff will face higher after-tax costs.

• A tech startup that offers free lunches to attract talent may need to rethink those perks.

  
  

Even if the dollar amount isn’t huge, every deduction counts when you’re running lean.

How to Prepare

Here are a few practical steps small business owners can take now:

1. Review your current food expenses.

   Look at what you spend on staff meals, snacks, or office coffee. How much will become nondeductible in 2026?

2. Shift to stipends or reimbursements.

   Instead of running an onsite lunch program, consider a meal allowance or reimbursing business-related meals. This can preserve deductibility in some cases.

3. Use fully deductible employee events.

   Hosting an annual appreciation dinner or holiday party is still a 100% deductible way to treat your team.

4. Keep excellent records.

   For travel meals and client lunches, make sure receipts clearly state the food cost (especially if tied to an entertainment event). Note who attended and the business purpose. This practice helps save from trying to remember what you did a week, month or longer

5. Talk to your tax advisor.

   Every business is different. A CPA or bookkeeper can help you structure meal benefits in the most tax-efficient way. Reach out to Your Bookkeeper Rebekah with any questions!

   
   

Bottom Line

For small business owners, the 2026 meal deduction changes mean one thing: no more write-offs for office snacks, coffee, and free staff meals. Client meals and travel meals stick around (at 50%), while employee parties stay fully deductible.

The best move you can make right now is to plan ahead — shift your perks strategy, tighten up your bookkeeping, and lean on deductible events and business-related meals. That way, when 2026 hits, you’ll be ready.