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Food and beverage expense deduction However, for tax years 2021 and 2022, section 274(n)(2)(D) of the Internal Revenue Code generally permits deduction of 100% of the expense for food and beverages provided by a restaurant.

However, the temporary 100% deduction for restaurant meals during 2021-2022 is no longer in effect. As of 2024, meals provided by restaurants are generally subject to the 50% deduction limit unless they meet specific exceptions.

Qualified business income deduction An individual who claims a qualified business income (“QBI”) deduction on their federal income tax return may be required to add back on their Colorado returns the full amount of the deduction.

Food and beverage expense deduction However, for tax years 2021 and 2022, section 274(n)(2)(D) of the Internal Revenue Code generally permits deduction of 100% of the expense for food and beverages provided by a restaurant.

There must be valid business purpose to the meal for it to be a deductible expense. Once this test is established, the expense falls into two categories: 50% deductible or 100% deductible. Meals with employees or business partners are only deductible if there is a direct or indirect business purpose.

Colorado Income Taxes The state income tax in Colorado is assessed at a flat rate of 4.40%, which means that everyone in Colorado pays that same rate, regardless of their income level. There are 12 other states with a flat income tax. Among these states, Colorado's rate ranks in about the middle of the pack.

Allowable federal standard deduction The required addback is the amount of the state income tax deduction claimed on the taxpayer's federal return or the amount by which a taxpayer's total itemized deductions exceed the standard deduction otherwise allowable to the taxpayer, whichever is less.

Qualified Business Income Deduction Addback If you claimed a deduction for qualified business income on your federal return and your adjusted gross income is greater than $500,000 ($1,000,000 if filing jointly), you are required to add to federal taxable income an amount equal to that deduction.

When filing a paper return, all W-2s and/or 1099s that show Colorado income tax withholding must be stapled to the front of the form where indicated. When filing an electronic return, attach scanned copies of all W-2s and/or 1099s that show Colorado income tax withholding to the e-filed tax return.