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coffee

TL;DR

Coffee expenses can be deductible if they are directly related to business activities, such as client meetings or office provisions, but personal consumption is not deductible.

Detailed Answer

Coffee is deductible as a business expense when it is purchased for business purposes, such as providing coffee to clients during meetings or supplying it in an office setting for employees. It is not deductible if it is for personal consumption or routine daily use by the business owner. For example, if a freelancer buys coffee for a client meeting at a café, this expense can be deducted. However, buying a daily coffee for personal consumption while working from home is not deductible. According to IRS guidelines, meals and beverages are generally subject to a 50% deduction limit, unless they are provided as part of a company-wide event or meeting.

Where to Put It on the Tax Form

Schedule C, Line 24b for meals and entertainment expenses.

Real World Example

A freelance graphic designer meets a client at a local café to discuss a project and buys coffee for both. The cost of the coffee is $10. The designer can deduct $5 (50% of $10) as a business expense on their Schedule C.

Calculation Required

A calculation is required for this deduction.

To calculate the deductible amount, take the total cost of the coffee purchased for business purposes and multiply by 50% to account for the deduction limit on meals and beverages.

Audit Risk & Documentation Tips

The audit risk for coffee expenses is moderate, as the IRS scrutinizes meals and entertainment deductions. Keep detailed records, including receipts, the business purpose of the meeting, and the names of attendees. Maintain a log of business meetings where coffee was purchased to substantiate the deduction.

IRS Reference

IRS Publication 463 (Travel, Entertainment, Gift, and Car Expenses) and IRC §162 (Trade or Business Expenses).

Relevant Industries

FreelancersConsultantsSmall Business OwnersReal Estate Agents

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on February 24, 2026

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