Can I Write This Off?

Can I write off meals with clients?

TL;DR

Yes, meals with clients can be partially deductible. However, there are specific conditions that must be met for the expense to be considered deductible.

Detailed Answer

Business meals with clients are considered a deductible business expense, but they are subject to a 50% limitation. This means that only 50% of the cost can be deducted. To qualify, the meal must be directly associated with the active conduct of a trade or business, the taxpayer or an employee of the taxpayer must be present at the meal, and the meal must not be lavish or extravagant under the circumstances. For example, if you are a freelance photographer and you take a client to lunch to discuss a potential project, you can deduct 50% of the meal cost. However, if the meal is overly extravagant, such as a five-star gourmet dinner with expensive wine, it may not be considered a deductible expense.

Where to Put It on the Tax Form

Report this deduction on Schedule C (Form 1040), Line 24b

Real World Example

If you are a freelance graphic designer and you take a client to lunch to discuss a project, you can deduct 50% of the cost of the meal. If the meal cost $60, you can deduct $30.

Calculation Required

A calculation is required for this deduction.

To calculate the deduction, add up the total cost of your business meals for the year and then divide by 2. This is the amount you can deduct.

Audit Risk & Documentation Tips

Keep detailed records of your meal expenses, including receipts, the names of those present, the business purpose of the meal, and the nature of the business discussion. This will help reduce your audit risk.

Can I write off meals with clients?

TL;DR

Detailed Answer

Where to Put It on the Tax Form

Real World Example

Calculation Required

Audit Risk & Documentation Tips

IRS Reference

Relevant Industries

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