Food & Beverage Deductions
Updated: Jun 24, 2021
Go ahead and wine and dine those clients -- taking out customers, vendors, and potential employees for a meal or entertainment for business purposes counts as a legit business tax deduction.
Business meals can be deducted at 50% if specific rules are followed:
The business owner or employee must be present
The cost of the meal or beverages can’t be "lavish or extravagant"
The meal should be with a business contact (like a customer, employee, vendor, or consultant)
The meal should have an "ordinary and necessary" business purpose.
You can ALSO deduct the meals you provide for employees at 50%, including any meals purchased while traveling or at all-employee events.
The only business meals that can be claimed at 100% deduction are charity events and events to promote goodwill in the community.
When taking this deduction, documentation is key! The IRS will want to see specific reasons and documentation for all of your deductions, so keep careful track of everything that you claim as a deduction. I recommend taking photos of your receipts and filing them in one place.
The rules are always changing and can be complex, but I’ll always keep you in the loop and make sure you’re getting all of the deductions available to you! Which client are you taking out to dinner next? 🍷