{"id":2938,"date":"2026-04-20T16:02:23","date_gmt":"2026-04-20T16:02:23","guid":{"rendered":"https:\/\/www.cpapilot.com\/blog\/?p=2938"},"modified":"2026-04-21T04:59:17","modified_gmt":"2026-04-21T04:59:17","slug":"restaurant-tax-planning-after-obbba","status":"publish","type":"post","link":"https:\/\/www.cpapilot.com\/blog\/restaurant-tax-planning-after-obbba\/","title":{"rendered":"Restaurant Tax Planning After OBBBA [2026]- FICA Tip and R&amp;D Credits"},"content":{"rendered":"\n<p>Restaurant tax planning is the process of structuring a restaurant client&#8217;s payroll, depreciation, credits, and meal-related deductions to capture industry-specific tax breaks. The most important provisions for restaurants are IRC&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/45B\" target=\"_blank\" rel=\"noopener\">\u00a745B<\/a>&nbsp;(FICA tip credit),&nbsp;<a href=\"https:\/\/www.cpapilot.com\/blog\/rd-tax-credit-form-6765-guide\/\" data-type=\"post\" data-id=\"2914\">\u00a741&nbsp;(R&amp;D credit)<\/a>,&nbsp;<a href=\"https:\/\/www.cpapilot.com\/blog\/bonus-depreciation\/\" data-type=\"post\" data-id=\"2149\">\u00a7168(k)&nbsp;(bonus depreciation)<\/a>,&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/163\" target=\"_blank\" rel=\"noopener\">\u00a7163(j)<\/a>&nbsp;(business interest limitation), and&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/274\" target=\"_blank\" rel=\"noopener\">\u00a7274(n)<\/a>(meal deductibility).<\/p>\n\n\n\n<div class=\"wp-block-group has-pale-cyan-blue-background-color has-background\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<h3 class=\"wp-block-heading\"><strong>TL;DR: Key Restaurant Tax Planning Changes After OBBBA for CPAs<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Restaurant tax planning in 2026 focuses on a few high-value tax strategies.<\/li>\n\n\n\n<li>The \u00a745B FICA tip credit remains the biggest opportunity for many restaurant clients.<\/li>\n\n\n\n<li>OBBBA made 100% bonus depreciation permanent for qualifying property.<\/li>\n\n\n\n<li>OBBBA also restored an EBITDA-based \u00a7163(j) calculation, which can increase deductible business interest.<\/li>\n\n\n\n<li>Restaurants may qualify for R&amp;D credits when they test recipes, improve cooking methods, or refine kitchen processes.<\/li>\n\n\n\n<li>Meal deduction rules remain limited, so CPAs should update restaurant clients on current B2B catering guidance.<\/li>\n\n\n\n<li>CPAs who apply these rules correctly can uncover larger savings and deliver stronger advisory value.<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p>For CPAs, this matters because the real value is in year-round planning, not just year-end filing. The&nbsp;<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/fica-tip-credit-for-employers\" target=\"_blank\" rel=\"noopener\">FICA tip credit<\/a>&nbsp;alone can save a mid-size restaurant group $40,000 to $80,000 annually, and the <a href=\"https:\/\/www.cpapilot.com\/blog\/one-big-beautiful-bill-act-explained\/\" data-type=\"post\" data-id=\"2170\">2025 One Big Beautiful Bill Act (OBBBA)<\/a> adds even more opportunity through permanent 100% bonus depreciation under \u00a7168(k) and an&nbsp;<a href=\"https:\/\/www.grantthornton.com\/insights\/alerts\/tax\/2025\/legislative-updates\/obbba-restores-previous-163-benefits-adds-some-new-limitations\" target=\"_blank\" rel=\"noopener\">EBITDA-based reversion<\/a>&nbsp;for the \u00a7163(j) interest limitation.<\/p>\n\n\n\n<p>Restaurant clients generate some of the most labor-intensive returns in any CPA&#8217;s practice. Most of the value isn&#8217;t in the return itself; it&#8217;s in the planning before year-end. If you&#8217;re filing restaurant returns without running the \u00a745B&nbsp;<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/fica-tip-credit-for-employers\" target=\"_blank\" rel=\"noopener\">FICA tip credit calculation<\/a>&nbsp;on&nbsp;<a href=\"https:\/\/www.irs.gov\/pub\/irs-access\/f8846_accessible.pdf\" target=\"_blank\" rel=\"noopener\">Form 8846<\/a>, you&#8217;re doing compliance, not advisory.<\/p>\n\n\n\n<p>Here&#8217;s what&#8217;s actually moving the needle for restaurant clients in 2026: the FICA tip credit, OBBBA&#8217;s permanent 100% bonus depreciation, the EBITDA reversion for \u00a7163(j), R&amp;D credits for menu development, and updated meal deductibility rules under \u00a7274(n).<\/p>\n\n\n\n<p>This guide walks through the mechanics of these credits and deductions, the common mistakes CPAs make, and a practical 2026 action list for your restaurant clients.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How the FICA Tip Credit Works for Restaurants&nbsp;<\/strong><\/h2>\n\n\n\n<p>The FICA tip credit is the single largest dollar-for-dollar credit available to most restaurant operators, yet a surprising number of CPAs either skip it entirely or calculate it incorrectly.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/fica-tip-credit-calculation-logic-1024x559.jpg\" alt=\"Infographic showing the calculation of the FICA tip credit based on tips exceeding the federal minimum wage threshold.\" class=\"wp-image-2941\" srcset=\"https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/fica-tip-credit-calculation-logic-1024x559.jpg 1024w, https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/fica-tip-credit-calculation-logic-300x164.jpg 300w, https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/fica-tip-credit-calculation-logic-768x419.jpg 768w, https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/fica-tip-credit-calculation-logic.jpg 1408w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">The \u00a745B credit is calculated on tips that exceed the amount needed to reach the $7.25 federal minimum wage.<\/figcaption><\/figure>\n\n\n\n<p>Under&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/45B\" target=\"_blank\" rel=\"noopener\">IRC \u00a745B<\/a>, an employer receives a general business credit equal to the employer&#8217;s share of FICA taxes (7.65%) paid on tips that exceed the amount needed to bring an employee&#8217;s cash wage to the federal minimum wage of $7.25 per hour. The credit applies only to tips received from customers for food or beverage service. Tips on delivery fees, employer-controlled service charges, or non-food\/beverage items do not qualify. The credit is claimed on&nbsp;<a href=\"https:\/\/www.irs.gov\/pub\/irs-access\/f8846_accessible.pdf\" target=\"_blank\" rel=\"noopener\">Form 8846<\/a>&nbsp;and flows to&nbsp;<a href=\"https:\/\/www.irs.gov\/forms-pubs\/about-form-3800\" target=\"_blank\" rel=\"noopener\">Form 3800<\/a>&nbsp;as a general business credit<\/p>\n\n\n\n<p>The math isn&#8217;t complicated, but the data collection is. Here&#8217;s what it looks like for a single tipped employee:<\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table class=\"has-pale-cyan-blue-background-color has-background has-fixed-layout\"><thead><tr><th><strong>Component<\/strong><\/th><th><strong>Amount<\/strong><\/th><\/tr><\/thead><tbody><tr><td>Hours worked in the year<\/td><td>2,000<\/td><\/tr><tr><td>Cash wage paid by the employer<\/td><td>$2.13\/hr ($4,260 total)<\/td><\/tr><tr><td>Tips reported by the employee<\/td><td>$38,000<\/td><\/tr><tr><td>Wages needed to reach $7.25\/hr<\/td><td>$7.25 x 2,000 = $14,500<\/td><\/tr><tr><td>Tips used to meet minimum wage<\/td><td>$14,500 &#8211; $4,260 = $10,240<\/td><\/tr><tr><td>Tips eligible for credit<\/td><td>$38,000 &#8211; $10,240 = $27,760<\/td><\/tr><tr><td>FICA tip credit (7.65%)<\/td><td><strong>$2,124<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Multiply that across 15 tipped employees, and you&#8217;re looking at a credit north of $30,000. For a restaurant group with 60 tipped servers across four locations, credits can hit $135,000.<\/p>\n\n\n\n<p><strong>A few things practitioners get wrong:<\/strong><\/p>\n\n\n\n<p><strong>The minimum wage offset.<\/strong>&nbsp;You only credit FICA on tips above the amount that brings the employee to $7.25\/hr. If your client pays the full minimum wage (some states require this &#8212; <a href=\"https:\/\/www.cpapilot.com\/blog\/california-tax-planning\/\" data-type=\"post\" data-id=\"2715\">California<\/a>, Washington, Oregon), the entire tip amount is eligible. No offset. That actually makes the credit larger in states with no tip credit against minimum wage.<\/p>\n\n\n\n<p><strong>State minimum wage vs. federal.<\/strong>&nbsp;The \u00a745B calculation uses the federal minimum wage of $7.25, not the state minimum. This confuses people. Even if your client is in a state with a $16.28 minimum wage, the credit computation uses $7.25. The IRS confirmed this in the&nbsp;<a href=\"https:\/\/www.irs.gov\/forms-pubs\/about-form-8846\" target=\"_blank\" rel=\"noopener\">instructions to Form 8846<\/a>. The &#8220;minimum wage&#8221; referenced in \u00a745B(b)(2) is the rate under Section 6(a)(1) of the <a href=\"https:\/\/www.investopedia.com\/terms\/f\/fair-labor-standards-act-flsa.asp\" target=\"_blank\" rel=\"noopener\">Fair Labor Standards Act<\/a>.<\/p>\n\n\n\n<p><strong>Interaction with the payroll tax deduction.<\/strong>&nbsp;Here&#8217;s the catch: \u00a745B(c) requires reducing the FICA deduction by the credit amount. You&#8217;re not double-dipping. The credit replaces a deduction. For a restaurant at 21% (C-Corp) or up to 37% (pass-through), the credit still beats the deduction. On a $30,000 credit, the lost deduction costs $6,300 at 21%. Net benefit: $23,700.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key OBBBA Tax Changes for Restaurants: Bonus Depreciation and \u00a7163(j)<\/strong><\/h2>\n\n\n\n<p>The&nbsp;<a href=\"https:\/\/www.cpapilot.com\/blog\/one-big-beautiful-bill-act-explained\/\">One Big Beautiful Bill Act (OBBBA)<\/a>, enacted in July 2025, delivers two major tax changes that directly impact restaurant operators: permanent 100% bonus depreciation under&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/168\" target=\"_blank\" rel=\"noopener\">IRC \u00a7168(k)<\/a>(confirmed by&nbsp;<a href=\"https:\/\/www.irs.gov\/pub\/irs-drop\/n-26-11.pdf\" target=\"_blank\" rel=\"noopener\">IRS Notice 2026-11<\/a>) and a reversion to EBITDA-based computation for the business interest limitation under&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/163\" target=\"_blank\" rel=\"noopener\">IRC \u00a7163(j)<\/a><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/obbba-bonus-depreciation-comparison-1024x559.jpg\" alt=\"Comparison chart showing the permanent 100 percent bonus depreciation versus the old declining percentage model.\" class=\"wp-image-2942\" srcset=\"https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/obbba-bonus-depreciation-comparison-1024x559.jpg 1024w, https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/obbba-bonus-depreciation-comparison-300x164.jpg 300w, https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/obbba-bonus-depreciation-comparison-768x419.jpg 768w, https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/obbba-bonus-depreciation-comparison.jpg 1408w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">OBBBA stabilized the tax landscape by making 100% bonus depreciation permanent for qualified property.<\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. Permanent 100% Bonus Depreciation<\/strong><\/h3>\n\n\n\n<p>Before OBBBA, bonus depreciation was scheduled to phase down to 40% in 2026 and eventually expire. OBBBA made 100% bonus depreciation permanent for qualified property acquired after January 19, 2025, and placed in service in tax years beginning after December 31, 2024. For an industry that spends heavily on&nbsp;<a href=\"https:\/\/www.bdo.com\/insights\/tax\/one-big-beautiful-bill-act-expands-100-depreciation-expensing-opportunities\" target=\"_blank\" rel=\"noopener\">kitchen equipment<\/a>,&nbsp;<a href=\"https:\/\/www.grantthornton.com\/insights\/alerts\/tax\/2025\/legislative-updates\/obbba-restores-previous-163-benefits-adds-some-new-li\/\" target=\"_blank\" rel=\"noopener\">qualified improvement property (QIP)<\/a>, and tenant buildouts, this is transformative. A typical full-service restaurant buildout runs $400,000 to $1.2 million in qualifying improvements, all of which can now be fully expensed in Year 1 under the&nbsp;<a href=\"https:\/\/www.irs.gov\/pub\/irs-drop\/n-26-11.pdf\" target=\"_blank\" rel=\"noopener\">100% bonus depreciation<\/a>&nbsp;rule.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. \u00a7163(j) Reverts to EBITDA-Based Limitation<\/strong><\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/ebitda-vs-ebit-interest-limit-1024x559.jpg\" alt=\"Diagram showing the difference between EBIT and EBITDA for business interest deduction limits.\" class=\"wp-image-2943\" srcset=\"https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/ebitda-vs-ebit-interest-limit-1024x559.jpg 1024w, https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/ebitda-vs-ebit-interest-limit-300x164.jpg 300w, https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/ebitda-vs-ebit-interest-limit-768x419.jpg 768w, https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/ebitda-vs-ebit-interest-limit.jpg 1408w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">: The reversion to EBITDA increases the &#8216;Adjusted Taxable Income&#8217; bucket, allowing for more interest to be deducted currently.<\/figcaption><\/figure>\n\n\n\n<p>The more impactful (and less obvious) change is to&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/163\" target=\"_blank\" rel=\"noopener\">\u00a7163(j)<\/a>. OBBBA reset the Adjusted Taxable Income (ATI) computation to add back depreciation, amortization, and depletion, effectively reverting to the pre-2022 EBITDA-based calculation.&nbsp;<\/p>\n\n\n\n<p>This expands the&nbsp;<a href=\"https:\/\/www.forvismazars.us\/forsights\/2026\/03\/transition-relief-for-section-163-j-business-interest-deduction-limitation\" target=\"_blank\" rel=\"noopener\">business interest deduction limit<\/a>&nbsp;for restaurant groups carrying debt on buildouts or acquisitions.<\/p>\n\n\n\n<pre class=\"wp-block-preformatted\"><strong>Example:&nbsp;<\/strong>One restaurant client carried $2.8 million in debt on a ground-up buildout with $196,000 in annual interest. Under the post-2021 EBIT-based \u00a7163(j) limitation, they were capped at a $140,000 deductible, with the remaining $56,000 carried forward. With OBBBA reverting to EBITDA, the full $196,000 becomes deductible in the current year. That's $56,000 more in deductions\u2014roughly $11,760 in tax savings at 21%.<\/pre>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What OBBBA Did Not Change: Meal Deductibility Rules&nbsp;<\/strong><\/h2>\n\n\n\n<p>OBBBA did not restore the 100% meal deductibility that existed under the&nbsp;<a href=\"https:\/\/www.pwc.com\/us\/en\/services\/tax\/library\/pwc-limits-on-employer-deductions-for-certain-meals-effective-in-2026.html\" target=\"_blank\" rel=\"noopener\">Consolidated Appropriations Act of 2021<\/a>&nbsp;for 2021\u20132022 business meals. Business meals are back to the standard 50% deduction under&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/274\" target=\"_blank\" rel=\"noopener\">IRC \u00a7274(n)<\/a>.&nbsp;<\/p>\n\n\n\n<p>This matters for your restaurant clients who cater corporate events or sell B2B catering packages.&nbsp;<\/p>\n\n\n\n<p>Their corporate customers can deduct 50% of the meal cost (unless it&#8217;s a&nbsp;<a href=\"https:\/\/uhy-us.com\/insights\/news\/2025\/november\/employee-meal-deductions-under-irc-section-274-what-s-changing-in-2026\" target=\"_blank\" rel=\"noopener\">holiday party<\/a>&nbsp;or&nbsp;<a href=\"https:\/\/whipplewood.com\/insights\/meals-entertainment-duction-changes\/\" target=\"_blank\" rel=\"noopener\">company-wide event<\/a>), which remains 100% deductible under&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/274\" target=\"_blank\" rel=\"noopener\">\u00a7274(e)(4)<\/a>. Don&#8217;t let clients price their corporate catering based on outdated 100% deduction assumptions, as it affects demand and pricing strategy.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>R&amp;D Tax Credits for Restaurants: What Menu and Process Work Qualifies<\/strong><\/h2>\n\n\n\n<p>Bringing up&nbsp;<a href=\"https:\/\/www.bdo.com\/insights\/industries\/restaurants\/restaurants-cook-up-tax-savings-with-the-r-d-tax-credit\" target=\"_blank\" rel=\"noopener\">R&amp;D tax credits<\/a>&nbsp;with restaurant clients often gets blank stares at first, but when the owner starts listing things they&#8217;ve experimented with (new recipes, cooking methods, equipment tweaks), that&#8217;s when CPAs should start taking notes.<\/p>\n\n\n\n<p>The R&amp;D credit under&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/41\" target=\"_blank\" rel=\"noopener\">IRC \u00a741<\/a>&nbsp;doesn&#8217;t care what industry you&#8217;re in. The four-part test under&nbsp;<a href=\"https:\/\/www.ecfr.gov\/current\/title-26\/section-1.41-4\" target=\"_blank\" rel=\"noopener\">Reg. \u00a71.41-4<\/a>&nbsp;asks whether an activity:&nbsp;<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Develops a new or improved business component,&nbsp;<\/li>\n\n\n\n<li>Is technological in nature,&nbsp;<\/li>\n\n\n\n<li>Involves uncertainty, and&nbsp;<\/li>\n\n\n\n<li>Involves a process of experimentation.&nbsp;<\/li>\n<\/ol>\n\n\n\n<p>Food science, menu development, and kitchen process engineering can absolutely qualify.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Restaurant R&amp;D Activities That Commonly Qualify<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Proprietary cooking process:&nbsp;<\/strong>A fast-casual chain developed a consistent cooking method for uniform quality across 12 locations. They spent 8 months testing temperature profiles and equipment settings. Qualifying wages: $85,000. Credit (Alternative Simplified Credit): ~$7,400.<\/li>\n\n\n\n<li><strong>Allergen-free recipe reformulation:<\/strong>&nbsp;A restaurant group reformulated recipes to eliminate specific allergens without changing taste, requiring systematic testing of substitute ingredients and documentation of failed approaches. This satisfies the &#8220;process of experimentation&#8221; prong. Qualifying expenses: $42,000. Credit: ~$4,200.<\/li>\n\n\n\n<li><strong>Commissary HVAC redesign<\/strong>: A commissary kitchen designed a modified HVAC system to meet new emissions standards while maintaining output. Engineering, testing, and redesign totaled $120,000 in qualifying expenditures.<\/li>\n<\/ul>\n\n\n\n<p>The credit typically won&#8217;t reach six figures for most single-location restaurants. But for multi-unit operators with a test kitchen, significant menu development, or commissary engineering, it can generate $15,000\u2013$50,000+ annually.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How to Claim R&amp;D Tax Credits for Restaurants?<\/strong><\/h2>\n\n\n\n<p>File&nbsp;<a href=\"https:\/\/www.irs.gov\/forms-pubs\/about-form-6765\" target=\"_blank\" rel=\"noopener\">Form 6765<\/a>&nbsp;(Credit for Increasing Research Activities), use the <a href=\"https:\/\/www.law.cornell.edu\/cfr\/text\/26\/1.41-9\" target=\"_blank\" rel=\"noopener\">Alternative Simplified Credit (ASC) <\/a>method in Section B, and document the four-part test for each activity.<\/p>\n\n\n\n<p><strong>Keep detailed records:&nbsp;<\/strong>Test logs, failed experiments, ingredient substitution data, temperature profiles, and engineering notes.<\/p>\n\n\n\n<p><strong><em>OBBBA Restored Immediate Expensing Under \u00a7174A&nbsp;<\/em><\/strong><\/p>\n\n\n\n<p>OBBBA fixed the \u00a7174 issue.&nbsp;<a href=\"https:\/\/www.irs.gov\/newsroom\/one-big-beautiful-bill-provisions\" target=\"_blank\" rel=\"noopener\">IRC \u00a7174A<\/a>&nbsp;(Section 70302 of P.L. 119-21) restored immediate expensing for domestic research and experimental (R&amp;E) expenditures after December 31, 2024.&nbsp;<\/p>\n\n\n\n<p>Restaurant clients can now deduct R&amp;D expenses immediately AND claim the \u00a741 credit separately, no need to capitalize and amortize.<\/p>\n\n\n\n<p>For 2022\u20132024 amounts previously capitalized (under the TCJA amortization requirement),&nbsp;<a href=\"https:\/\/www.irs.gov\/pub\/irs-drop\/rp-25-28.pdf\" target=\"_blank\" rel=\"noopener\">Rev. Proc. 2025-28<\/a>&nbsp;provides transition relief and guidance on how to handle prior-year capitalization. Track the credit and deduction separately on your client&#8217;s return.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Cost Segregation for Restaurant Buildouts and Owned Buildings<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/restaurant-cost-segregation-breakdown-1024x559.jpg\" alt=\"Pie chart illustrating the reclassification of building assets into 5, 7, and 15 year depreciation lives.\" class=\"wp-image-2945\" srcset=\"https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/restaurant-cost-segregation-breakdown-1024x559.jpg 1024w, https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/restaurant-cost-segregation-breakdown-300x164.jpg 300w, https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/restaurant-cost-segregation-breakdown-768x419.jpg 768w, https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/restaurant-cost-segregation-breakdown.jpg 1408w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Cost segregation studies can reclassify up to 45% of a building&#8217;s cost into accelerated depreciation categories.<\/figcaption><\/figure>\n\n\n\n<p>Restaurant buildouts are tailor-made for cost segregation studies. A typical full-service restaurant buildout runs $400,000 to $1.2 million in&nbsp;<a href=\"https:\/\/www.irs.gov\/publications\/p946\" target=\"_blank\" rel=\"noopener\">tenant improvements (TI)<\/a>. Under default treatment, these qualify as&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/168\" target=\"_blank\" rel=\"noopener\">15-year Qualified Improvement Property (QIP)<\/a>&nbsp;under&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/168\" target=\"_blank\" rel=\"noopener\">IRC \u00a7168(e)(6)<\/a>&nbsp;and&nbsp;<a href=\"https:\/\/www.irs.gov\/publications\/p946\" target=\"_blank\" rel=\"noopener\">IRS Publication 946<\/a>.<\/p>\n\n\n\n<p>With OBBBA&#8217;s permanent 100% bonus depreciation under&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/168\" target=\"_blank\" rel=\"noopener\">IRC \u00a7168(k)<\/a>&nbsp;confirmed by&nbsp;<a href=\"https:\/\/www.irs.gov\/pub\/irs-drop\/n-26-11.pdf\" target=\"_blank\" rel=\"noopener\">IRS Notice 2026-11<\/a>&nbsp;for property acquired after January 19, 2025, QIP gets first-year expensing. So why bother with a cost segregation study?<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>For owned buildings (39-year property): Cost segregation reclassifies 20\u201340% (typically 35\u201345%) into 5-year, 7-year, and 15-year assets under&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/168\" target=\"_blank\" rel=\"noopener\">IRC \u00a7168<\/a><\/li>\n\n\n\n<li>For state decoupling: Some states don&#8217;t conform to federal bonus depreciation rules<\/li>\n\n\n\n<li>For prior-year buildouts: File&nbsp;<a href=\"https:\/\/www.irs.gov\/forms-pubs\/about-form-3115\" target=\"_blank\" rel=\"noopener\">Form 3115<\/a>&nbsp;for catch-up via&nbsp;<a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/i3115.pdf\" target=\"_blank\" rel=\"noopener\">IRC \u00a7481(a)<\/a>&nbsp;adjustment<\/li>\n\n\n\n<li>For non-QIP components: Kitchen equipment, wiring, HVAC may be 5- or 7-year property under&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/1245\" target=\"_blank\" rel=\"noopener\">IRC \u00a71245<\/a><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Assets Commonly Reclassified in a Restaurant Cost Segregation Study&nbsp;<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table class=\"has-pale-cyan-blue-background-color has-background has-fixed-layout\"><thead><tr><th><strong>Component<\/strong><\/th><th><strong>Reclassified Life<\/strong><\/th><th><strong>Property Type<\/strong><\/th><\/tr><\/thead><tbody><tr><td>Walk-in coolers and freezers<\/td><td><a href=\"https:\/\/www.irs.gov\/publications\/p946\" target=\"_blank\" rel=\"noopener\">7-year<\/a><\/td><td><a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/1245\" target=\"_blank\" rel=\"noopener\">IRC \u00a71245 property<\/a><\/td><\/tr><tr><td>Commercial kitchen equipment<\/td><td><a href=\"https:\/\/www.irs.gov\/publications\/p946\" target=\"_blank\" rel=\"noopener\">5-year<\/a><\/td><td><a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/1245\" target=\"_blank\" rel=\"noopener\">IRC \u00a71245<\/a><\/td><\/tr><tr><td>Specialized electrical for kitchen equipment<\/td><td><a href=\"https:\/\/www.irs.gov\/publications\/p946\" target=\"_blank\" rel=\"noopener\">5-year<\/a>&nbsp;or&nbsp;<a href=\"https:\/\/www.irs.gov\/publications\/p946\" target=\"_blank\" rel=\"noopener\">15-year<\/a><\/td><td><a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/1245\" target=\"_blank\" rel=\"noopener\">IRC \u00a71245<\/a>&nbsp;\/ QIP<\/td><\/tr><tr><td>Beverage tubing and piping<\/td><td><a href=\"https:\/\/www.irs.gov\/publications\/p946\" target=\"_blank\" rel=\"noopener\">5-year<\/a><\/td><td><a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/1245\" target=\"_blank\" rel=\"noopener\">IRC \u00a71245<\/a><\/td><\/tr><tr><td>Decorative lighting, sound systems, and millwork<\/td><td><a href=\"https:\/\/www.irs.gov\/publications\/p946\" target=\"_blank\" rel=\"noopener\">5-year<\/a>&nbsp;or&nbsp;<a href=\"https:\/\/www.irs.gov\/publications\/p946\" target=\"_blank\" rel=\"noopener\">7-year<\/a><\/td><td><a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/1245\" target=\"_blank\" rel=\"noopener\">IRC \u00a71245<\/a><\/td><\/tr><tr><td>Grease traps, specialized plumbing, exhaust hoods<\/td><td><a href=\"https:\/\/www.irs.gov\/publications\/p946\" target=\"_blank\" rel=\"noopener\">7-year<\/a>&nbsp;or&nbsp;<a href=\"https:\/\/www.irs.gov\/publications\/p946\" target=\"_blank\" rel=\"noopener\">15-year<\/a><\/td><td><a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/1245\" target=\"_blank\" rel=\"noopener\">IRC \u00a71245<\/a>&nbsp;\/ QIP<\/td><\/tr><tr><td>Exterior signage, patio improvements<\/td><td><a href=\"https:\/\/www.irs.gov\/publications\/p946\" target=\"_blank\" rel=\"noopener\">15-year<\/a><\/td><td>QIP<\/td><\/tr><tr><td>Paved parking lots, sidewalks, landscaping<\/td><td><a href=\"https:\/\/www.irs.gov\/publications\/p946\" target=\"_blank\" rel=\"noopener\">15-year<\/a><\/td><td>Land improvements<\/td><\/tr><tr><td>Security and POS wiring<\/td><td><a href=\"https:\/\/www.irs.gov\/publications\/p946\" target=\"_blank\" rel=\"noopener\">5-year<\/a><\/td><td><a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/1245\" target=\"_blank\" rel=\"noopener\">IRC \u00a71245 property<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>If your client did a buildout in a prior year without a cost segregation study, you can still claim the accelerated depreciation by filing&nbsp;<\/p>\n\n\n\n<p><a href=\"https:\/\/www.irs.gov\/forms-pubs\/about-form-3115\" target=\"_blank\" rel=\"noopener\">Form 3115<\/a>&nbsp;(Application for Change in Accounting Method). The catch-up depreciation comes as an&nbsp;<a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/i3115.pdf\" target=\"_blank\" rel=\"noopener\">IRC \u00a7481(a) adjustment<\/a>&nbsp;in the current year\u2014no amended returns needed.<\/p>\n\n\n\n<p>Firms have successfully run this with catch-up deductions ranging from $90,000 to $310,000 for prior-year buildouts, capturing missed bonus depreciation and reclassified component lives.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Meal Deductibility Rules for Restaurant Clients and Their B2B Customers&nbsp;<\/strong><\/h2>\n\n\n\n<p>Your restaurant clients will ask about meal deductibility rules; it doesn&#8217;t affect their own tax return directly (since they sell meals, not consume them as employers), but it affects their corporate catering and B2B sales.&nbsp;<\/p>\n\n\n\n<p>Their corporate customers need to know what they can deduct when ordering catering or hosting client meals at your client&#8217;s restaurant.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Current Meal Deductibility Rules for Corporate Customers in 2026&nbsp;<\/strong><\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/meal-deductibility-rules-matrix-1024x559.jpg\" alt=\"Table showing 100 percent, 50 percent, and 0 percent meal deductibility categories for businesses.\" class=\"wp-image-2944\" srcset=\"https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/meal-deductibility-rules-matrix-1024x559.jpg 1024w, https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/meal-deductibility-rules-matrix-300x164.jpg 300w, https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/meal-deductibility-rules-matrix-768x419.jpg 768w, https:\/\/www.cpapilot.com\/blog\/wp-content\/uploads\/2026\/04\/meal-deductibility-rules-matrix.jpg 1408w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Understanding the shift in meal deductibility is key for advising B2B catering clients.<\/figcaption><\/figure>\n\n\n\n<p>Under&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/274\" target=\"_blank\" rel=\"noopener\">IRC \u00a7274(n)<\/a>&nbsp;and new \u00a7274(o) (effective 2026), the deduction limits for business meal expenses are:<\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table class=\"has-pale-cyan-blue-background-color has-background has-fixed-layout\"><thead><tr><th><strong>Type of Expense<\/strong><\/th><th><strong>Deductible Percentage<\/strong><\/th><th><strong>Requirements<\/strong><\/th><\/tr><\/thead><tbody><tr><td>Business meals with a client or associate<\/td><td>50% deductible<\/td><td>Clear business purpose required; substantiation of time, place, and business purpose needed&nbsp;<\/td><\/tr><tr><td>Office snacks and breakroom meals<\/td><td>0% deductible (post-2025)<\/td><td>Employer-provided, not taxed as compensation&nbsp;<\/td><\/tr><tr><td>Meals for employee convenience (on-premises, not taxed to employee)<\/td><td>0% deductible (post-2025)<\/td><td>Excludable from employee income under&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/119\" target=\"_blank\" rel=\"noopener\">\u00a7119<\/a><\/td><\/tr><tr><td>Employee meals at restaurant-operated eating facilities<\/td><td>0% deductible<\/td><td>Unless taxed as compensation&nbsp;<\/td><\/tr><tr><td>Holiday parties and company-wide events<\/td><td>100% deductible<\/td><td>Under&nbsp;<a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/274\" target=\"_blank\" rel=\"noopener\">\u00a7274(e)(4)<\/a>&nbsp;(recreational\/social events for employees)&nbsp;<\/td><\/tr><tr><td>Meals are included in employee compensation<\/td><td>100% deductible to the employer<\/td><td>Taxable to employee (reported on W-2); substantiation required&nbsp;<\/td><\/tr><tr><td>Meals made available to the general public<\/td><td>100% deductible<\/td><td>Promotional\/marketing meals&nbsp;<\/td><\/tr><tr><td>Meals sold to customers (restaurants selling food)<\/td><td>100% deductible<\/td><td>Bona fide sale transaction&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What Changed in 2026: Office Snacks and Employer Meals&nbsp;<\/strong><\/h3>\n\n\n\n<p>The&nbsp;<strong>temporary 100% meal deduction<\/strong>&nbsp;that applied in&nbsp;<strong>2021\u20132022<\/strong>&nbsp;under the <a href=\"https:\/\/www.pwc.com\/us\/en\/services\/tax\/library\/pwc-limits-on-employer-deductions-for-certain-meals-effective-in-2026.html\" target=\"_blank\" rel=\"noopener\"><strong>Consolidated Appropriations Act of 2021<\/strong><\/a>&nbsp;has&nbsp;<strong>expired<\/strong>&nbsp;and was&nbsp;<strong>not renewed<\/strong>&nbsp;by OBBBA.<\/p>\n\n\n\n<p>Starting in 2026, OBBBA modified&nbsp;<a href=\"https:\/\/taxnews.ey.com\/news\/2025-1370-irc-section-274o-employee-meal-expense-deduction-disallowance-goes-into-effect-beginning-in-2026#:~:text=IRC%20Section%20274(o)%20employee,Background\" target=\"_blank\" rel=\"noopener\">IRC \u00a7274(o)<\/a>&nbsp;so employer-provided on-premises meals are no longer deductible (0%), unless taxed as compensation<\/p>\n\n\n\n<p><strong>Business meals remain 50% deductible<\/strong>&nbsp;under&nbsp;<strong>\u00a7274(n)<\/strong>&nbsp;with proper substantiation (amount, date, location, business purpose, participants).jupid+1<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Why Meal Deductibility Changes Matter for Restaurant Clients&nbsp;<\/strong><\/h4>\n\n\n\n<p>Don&#8217;t let your clients&nbsp;<strong>price their corporate catering packages<\/strong>&nbsp;based on outdated&nbsp;<strong>100% deduction assumptions<\/strong>. Their corporate B2B customers can now only deduct:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>50%<\/strong>&nbsp;of client meals and business-meeting catering (requires business purpose + documentation)<\/li>\n\n\n\n<li><strong>0%<\/strong>&nbsp;of office snacks or breakroom catering (unless converted to taxable compensation)<\/li>\n\n\n\n<li><strong>100%<\/strong>&nbsp;of holiday parties, company-wide events, and employee recreation (Q4 season)<\/li>\n<\/ul>\n\n\n\n<p>This affects&nbsp;<strong>pricing strategy<\/strong>,&nbsp;<strong>demand forecasting<\/strong>, and&nbsp;<strong>sales messaging<\/strong>. Corporate buyers may scale back on regular lunch catering (50% deductible) but increase Q4 holiday party spending (100% deductible).uhy-us+1<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>What CPAs Should Tell Restaurant Clients&nbsp;<\/strong><\/h4>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Educate corporate customers<\/strong>&nbsp;on what&#8217;s deductible\u2014don&#8217;t let them overpay for catering, expecting 100% write-offs<\/li>\n\n\n\n<li><strong>Promote Q4 holiday party packages<\/strong>\u2014the 100% deductibility under&nbsp;<strong>\u00a7274(e)(4)<\/strong>&nbsp;is a strong sales driver<\/li>\n\n\n\n<li><strong>Reframe office snacks<\/strong>&nbsp;as &#8220;employee compensation&#8221; if they want&nbsp;<strong>100% deductibility<\/strong>&nbsp;(but must be taxed as income).<\/li>\n\n\n\n<li><strong>Update marketing materials<\/strong>&nbsp;to reflect correct deduction rates\u2014accuracy builds credibility with B2B customers.<\/li>\n\n\n\n<li><strong>Track meal types separately<\/strong>&nbsp;in their own books\u2014<strong>\u00a7274<\/strong>&nbsp;requires proper categorization for audits.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Restaurant Tax Planning Checklist for CPAs<\/strong><\/h2>\n\n\n\n<p>For your restaurant clients, the priority list looks like this:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Pull payroll data and run the \u00a745B FICA tip credit for every open year. If you haven&#8217;t been filing Form 8846, you can amend back three years. For a 25-server restaurant, that&#8217;s potentially $60,000-$90,000 in refunds across three years.<br><\/li>\n\n\n\n<li>Revisit the \u00a7163(j) interest limitation. If your client was carrying forward a disallowed business interest, the OBBBA EBITDA reversion may free it up. Check the carry-forward schedule.<br><\/li>\n\n\n\n<li>Screen for R&amp;D credits &#8212; especially multi-unit operators and commissary kitchens. The credit is real and defensible if documented properly.<\/li>\n<\/ul>\n\n\n\n<p>Get a cost seg study on any owned building or significant buildout. If it was done in a prior year without a study, file Form 3115 and pick up the catch-up.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Common Restaurant Tax Mistakes CPAs Should Avoid\u00a0<\/strong><\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Not filing Form 8846 at all, or calculating \u00a745B using the state minimum wage instead of $7.25<\/li>\n\n\n\n<li>Forgetting the \u00a745B(c) deduction offset and overstating the net benefit<\/li>\n\n\n\n<li>Missing the \u00a7163(j) EBITDA reversion and leaving interest carryforwards on the table<\/li>\n\n\n\n<li>Assuming R&amp;D credits don&#8217;t apply to food service<\/li>\n\n\n\n<li>Defaulting restaurant buildouts to straight 15-year QIP without a cost seg study on owned buildings<\/li>\n\n\n\n<li>Repeating outdated 100% meal deduction guidance to clients running corporate catering programs<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Conclusion &#8211; Turn Restaurant Tax Complexity Into Advisory Value<\/strong><\/h2>\n\n\n\n<p>Restaurant tax planning is no longer just about filing returns; it&#8217;s about capturing industry-specific savings that most CPAs miss. From the FICA tip credit to OBBBA&#8217;s permanent bonus depreciation, the difference between a compliant return and a transformative advisory engagement comes down to precision, speed, and the right research tools.&nbsp;<\/p>\n\n\n\n<p>Stop spending hours digging through IRC sections, IRS notices, and fragmented guidance. Start delivering confident, defensible advice in minutes.<\/p>\n\n\n\n<p class=\"has-luminous-vivid-amber-background-color has-background\">\ud83d\ude80&nbsp;<a href=\"https:\/\/cpapilot.com\/\" target=\"_blank\" rel=\"noopener\">Try CPA Pilot Free Today<\/a>&nbsp;and discover how AI-powered tax research is transforming CPA workflows:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Instant IRC &amp; Reg citations for FICA tip credits (\u00a745B), R&amp;D qualifications (\u00a741), and OBBBA changes (\u00a7168(k), \u00a7163(j), \u00a7174A)<\/li>\n\n\n\n<li>Pre-built research memos on restaurant-specific tax provisions\u2014no more starting from scratch<\/li>\n\n\n\n<li>Smart workflows that cut research time by 50%+, letting you focus on high-value advisory instead of compliance drudgery<\/li>\n\n\n\n<li>Confidence at your fingertips with authoritative, up-to-date guidance that stands up to audits<\/li>\n<\/ul>\n\n\n\n<p class=\"has-luminous-vivid-amber-background-color has-background\">Join thousands of forward-thinking CPAs who are already using CPA Pilot to educate clients faster, uncover hidden savings, and grow their practice with premium advisory services. <a href=\"https:\/\/www.cpapilot.com\/cpa-pilot-demo\/\">Book a 30-Minute Demo Today!!!<\/a><\/p>\n\n\n\n<p><em>Your next restaurant client is waiting for advice that only you can provide. Don&#8217;t let research bottlenecks hold you back.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Restaurant Tax Planning FAQs<\/h2>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>How is the FICA tip credit calculated under IRC \u00a745B?<\/strong><\/h4>\n\n\n\n<p>Credit = 7.65% \u00d7 tips exceeding the amount to reach $7.25\/hr (federal min). File Form 8846; credit flows to Form 3800. Reduce FICA deduction per \u00a745B(c).<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>What did OBBBA change for restaurants?<\/strong><\/h4>\n\n\n\n<p>OBBBA made 100% bonus depreciation (\u00a7168(k)) permanent for property acquired after Jan 19, 2025; reverted \u00a7163(j) to EBITDA-based ATI (more interest deductible); didn\u2019t restore 100% meals but created \u00a7174A for immediate R&amp;E expensing in 2025+.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Can a restaurant really claim R&amp;D tax credits?<\/strong><\/h4>\n\n\n\n<p>Yes, if activity meets Reg. \u00a71.41-4 four-part test (new\/improved component, technological, uncertainty, experimentation). Menu development, cooking processes, and commissary engineering qualify. File Form 6765; document each.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Are business meals still 50% deductible in 2026?<\/strong><\/h4>\n\n\n\n<p>Yes. IRC \u00a7274(n) limits ordinary business meals to 50% (business purpose + substantiation required). 100% deduction (2021\u20132022) expired; not renewed by OBBBA. Holiday parties remain 100% deductible under \u00a7274(e)(4).<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Is cost segregation still worth it with 100% bonus depreciation?<\/h4>\n\n\n\n<p>Yes, for owned buildings (39-year property). Reclassify 20\u201335% into 5\/7\/15-year assets for six-figure deductions. Critical in decoupled states. Use Form 3115 (\u00a7481(a) adjustment) for prior-year catch-up.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Restaurant tax planning is the process of structuring a restaurant client&#8217;s payroll, depreciation, credits, and meal-related deductions to capture industry-specific tax breaks. The most important provisions for restaurants are IRC&nbsp;\u00a745B&nbsp;(FICA tip credit),&nbsp;\u00a741&nbsp;(R&amp;D credit),&nbsp;\u00a7168(k)&nbsp;(bonus depreciation),&nbsp;\u00a7163(j)&nbsp;(business interest limitation), and&nbsp;\u00a7274(n)(meal deductibility). TL;DR: Key Restaurant Tax Planning Changes After OBBBA for CPAs For CPAs, this matters because the real [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":2940,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[257],"tags":[79,294,293,297,71,276,296,298,292,295],"class_list":["post-2938","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry-tax-planning","tag-bonus-depreciation","tag-cost-segregation","tag-fica-tip-credit","tag-meal-deductibility","tag-obbba","tag-rd-tax-credit","tag-restaurant-cpas","tag-restaurant-tax-credits","tag-restaurant-tax-planning","tag-section-163j"],"modified_by":"CPA Pilot","_links":{"self":[{"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/posts\/2938","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/comments?post=2938"}],"version-history":[{"count":5,"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/posts\/2938\/revisions"}],"predecessor-version":[{"id":2949,"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/posts\/2938\/revisions\/2949"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/media\/2940"}],"wp:attachment":[{"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/media?parent=2938"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/categories?post=2938"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cpapilot.com\/blog\/wp-json\/wp\/v2\/tags?post=2938"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}