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Is irs meals and entertainment tax deductible?

TL;DR

Meals are generally 50% deductible if they are business-related, while entertainment expenses are not deductible.

Detailed Answer

Business meals can be deducted at 50% if they are ordinary and necessary expenses incurred in the course of business, and the taxpayer or an employee is present. Entertainment expenses, however, are not deductible under the Tax Cuts and Jobs Act of 2017. For example, a meal with a client to discuss business is deductible, but tickets to a sporting event are not.

Where to Put It on the Tax Form

Schedule C (Form 1040), Line 24b for meals

Real World Example

A freelance graphic designer takes a client out for lunch to discuss a project. The cost of the meal is $100, and the designer can deduct $50 on their tax return.

Calculation Required

A calculation is required for this deduction.

Calculate 50% of the total meal expense. For example, if the meal cost is $200, the deductible amount is $100.

Audit Risk & Documentation Tips

To minimize audit risk, keep detailed records of the meal expenses, including receipts, the business purpose, and the attendees. It's important to document the date, location, and business relationship of the person(s) involved.

IRS Reference

IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses

Relevant Industries

Small BusinessConsultantsSales ProfessionalsFreelancers

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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 15, 2025

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