Final answer:
Historically, 50% of business-related meals and entertainment expenses were deductible, but current laws have eliminated deductions for entertainment while maintaining the 50% deduction for meal expenses, under certain conditions.
Step-by-step explanation:
While the specifics can vary depending on tax laws in effect at during a given time period, historically, for business tax deductions, the IRS allowed a deduction of 50% for business-related meals and entertainment expenses. However, under the Tax Cuts and Jobs Act of 2017, business entertainment expenses are no longer deductible, while meal expenses for business purposes remain at 50% deductible if they meet certain criteria. These criteria generally require that the expense be an ordinary and necessary part of carrying on the taxpayer's business, not lavish or extravagant, and directly related to or associated with business activities. It's crucial to keep up with the current tax code or consult with a tax professional, as these rules can change with new legislation.