Many freelancers and small business owners believe that, in order for a lunch to count as a"business meal", it needs to come with a white tablecloth and a French waiter serving you le plat du jour. Not true.
All types of self-employed people — not just consultants and salespeople — should be claiming business lunches. The key is to know what counts.
In this guide, we’ll cover everything you need to know about writing off meals — what to claim, what to avoid, and how to keep records.
What counts as a "business meal"?
The 2017 Tax Cuts and Jobs Act has left some folks confused about the rules of deducting business meals. The truth is, there are no new restrictions on business meals.
What got cut was client entertainment expenses — think concert tickets, or a round of golf. Meals are still tax-deductible. (50% of their cost can be deducted.)
Now that we've gotten that out of the way, let's talk about how to take that deduction. The IRS guidance on business meals notes that “the food and beverages" must be "provided to a current or potential business customer, client, consultant, or similar business contact.”
There's some ambiguity in the phrase “similar business contact”. So we'll breaking down what counts — and what doesn't.
✓ Taking a client out for lunch
This one’s obvious. If you go out for lunch with a client, work will come up in the discussion. You don’t even need to pay for the other person’s meal.
✓ Wooing a prospective client
Building and maintaining your network is critical to maintaining your business. Past coworkers and friends in similar industries could all eventually turn into prospective clients -- or introduce you to one.
You don’t need to sign contracts at the table for lunch with them to count as a business meal.
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✓ Business meal with a coworker
Going out with a business colleague with the express goal of discussing business is deductible. Just make sure to keep notes of your conversation.
✓ A networking opportunity
Don't miss out on this one! It's very important to stay on top of the latest news and trends in your industry.
Meeting with other professionals to network or swap tips is a great way to grow your business. After all, most people get referrals from someone they already know! Just make sure to keep notes of your conversation.
In case of an audit, you'll want to make sure to keep some record of what was discussed. A follow-up email or notes will do.
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What doesn't count as a business meal?
Unfortunately, you can't deduct all the food that you consume on the job. These examples may seem like no-brainers, but they're not actually qualified deductions.
✘ Snacking while working
Rule of thumb: if eating on the job is not a requirement for employment, then it's not a deduction.
Say you’re a security guard on a 1099 contract, and you’re not supposed to leave your post all day. In that case, the snacks you buy are tax-deductible.
If you’re merely a busy professional trying to save time between meetings, consider it a personal expense.
✘ Stocking your home office with groceries
Sorry, folks. It’s very unlikely that your grocery bill is a tax deduction — even if you're outfitting a home office.
✘ Grabbing a solo lunch
Getting lunch by yourself doesn't count as a business meal, even if you hop on a call at the cafe. This includes getting a coffee while working at your local coffee shop.
Rule of thumb: If you’re alone, it’s not deductible.
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Keeping records for your business meals
It's good to keep records of your business meals in case of audit. This is an expense category often scrutinized by the IRS, so it's best to keep notes on your business meals using a platform like Keeper.
At Keeper, we’re on a mission to help people overcome the complexity of taxes. We’ve provided this information for educational purposes, and it does not constitute tax, legal, or accounting advice. If you would like a tax expert to clarify it for you, feel free to sign up for Keeper. You may also email support@keepertax.com with your questions.
Business meals are generally 50% deductible in 2024. However, there are certain situations where meals can be 100% deductible, such as when they are provided for the employer's convenience at the workplace or when provided as part of a social event for employees.
What Is the Meal Deduction for 2024? You may deduct 50% of the total cost of a business meal. For example, if a meal costs $100, you may deduct $50. Or, if you use the standard meal allowance (see below), you may deduct on your tax return 50% of the allowance amount.
Food and beverages were 100% deductible if purchased from a restaurant in 2021 and 2022. But for purchases made in 2023 onwards, the rules revert back to how they were defined in the Tax Cuts and Jobs Act. This means purchases at restaurants are no longer 100% deductible.
The deduction for business meals is generally limited to 50% of the unreimbursed cost. If you're self-employed, you can deduct travel expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship), or if you're a farmer, on Schedule F (Form 1040), Profit or Loss From Farming.
Business meals with clients or colleagues. Meals while traveling on business. Treating a few employees to a meal (Note – if it's at least half of all employees, it's 100% deductible!) Food for an in-office meeting.
In 2024, the standard deduction is $14,600 for single filers and those married filing separately, $29,200 for those married filing jointly, and $21,900 for heads of household. The 2024 standard deduction applies to tax returns filed in 2025. $29,200.
An itemized meal receipt should have the name of the establishment, the date of service, the items purchased, the amount paid for each item, and the tax. If the tip is not included in the total it should be written on the receipt.
The amount of the $309 high rate and $214 low rate that is treated as paid for meals for purposes of § 274(n) is $74 for travel to any high- cost locality and $64 for travel to any other locality within CONUS.
What you can deduct: Flights, hotels, taxis and food are deductible business expenses as long as they're for actual, legitimate business purposes. Internal Revenue Service. About Publication 463, Travel, Gift, and Car Expenses. Accessed Apr 7, 2023.
You can deduct 100 percent of the expense because Starbucks prepares and sells food or beverages to retail customers for immediate consumption. Example 3. You meet for lunch with a customer at your office.
The following types of expenses are 100% deductible:
Meals during business travel. Meals at a seminar or conference. Client business meals (provided the taxpayer is present and the meal is not lavish or extravagant) Meals included as taxable compensation to an employee or independent contractor.
The IRS does not require receipts, canceled checks, credit card slips, or other documentation for entertainment, meals, or certain travel expenses that cost less than $75. However, you must still document the facts listed above. This exemption does not apply to lodging.
Can I still deduct unreimbursed travel expenses for 2024? A: Unfortunately, no. Current tax laws don't allow employees to deduct unreimbursed travel expenses on their personal returns until after 2025. However, self-employed individuals can still deduct these expenses.
For the year 2023, the federal lodging rate is $98 and M&IE (meal and incidental expenses) rate is $59(the M&IE per diem tier for FY 2023 is $59-$79). Usually, in locations with high cost of living, the M&IE per diem rate skews toward the higher end of the official per diem tier.
The deduction for unreimbursed non-entertainment-related business meals is generally subject to a 50% limitation. You generally can't deduct meal expenses unless you (or your employee) are present at the furnishing of the food or beverages and such expense is not lavish or extravagant under the circ*mstances.
If you are subject to the Department of Transportation (DOT) hours of service limits, the allowable deductible percentage is increased to 80% for business meals consumed, or related to, any period of duty for which those are in effect.
Qualified business meals purchased from a restaurant in 2021 and 2022 are 100% deductible. However, for purchases made in 2023 and beyond, the rules established in the Tax Cuts and Jobs Act apply, which means restaurant expenses are once again subject to the 50% limit on deductibility.
In 2023, however, the deductions for business meals and entertainment have reverted to the values outlined in the 2017 Tax Cuts and Jobs Act (TCJA): most business meals are now 50% deductible instead of 100% deductible as they were in 2021 and 2022. Most entertainment expenses are not deductible.
Introduction: My name is Kareem Mueller DO, I am a vivacious, super, thoughtful, excited, handsome, beautiful, combative person who loves writing and wants to share my knowledge and understanding with you.
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