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Is irs meals and entertainment a valid tax write-off?

TL;DR

Meals can be a valid tax write-off if they are directly related to business activities, but entertainment expenses are generally not deductible. Misunderstanding the distinction between meals and entertainment can lead to incorrect deductions.

Detailed Answer

Business meals are deductible at 50% if they are ordinary and necessary expenses incurred in carrying on your trade or business, and the taxpayer (or an employee) is present. Meals must not be lavish or extravagant and should be directly related to the active conduct of business. Entertainment expenses, however, are not deductible under current IRS rules. For example, a meal during a business meeting at a restaurant is deductible at 50%, but tickets to a concert for entertaining clients are not deductible. Additionally, meals provided by a restaurant in 2021 and 2022 were temporarily 100% deductible due to COVID-19 relief measures.

Where to Put It on the Tax Form

Schedule C, Line 24b for meals. Entertainment expenses are not deductible and should not be included.

Real World Example

A freelance graphic designer meets a potential client at a local cafe to discuss a project. The meal costs $60. The designer can deduct $30 (50% of $60) on their Schedule C as a business meal expense.

Calculation Required

A calculation is required for this deduction.

Calculate 50% of the total meal expense to determine the deductible amount. For example, if the total meal expense is $100, the deductible amount is $50.

Audit Risk & Documentation Tips

Moderate audit risk. Taxpayers should keep detailed records including receipts, the date and location of the meal, the business purpose, and the names of the people present. A log or diary entry can be helpful to substantiate the business connection.

IRS Reference

IRS Publication 463, Travel, Gift, and Car Expenses; IRC §274.

Relevant Industries

FreelancersConsultantsSales ProfessionalsSmall Business Owners

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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 July 25, 2025

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