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Is meals and entertainment irs 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. It's important to distinguish between the two and adhere to specific IRS guidelines.

Detailed Answer

Business meals are deductible at 50% if they are ordinary and necessary expenses incurred in the course of business. This includes meals with clients, prospects, or employees where business is discussed. Entertainment expenses, however, are not deductible following the Tax Cuts and Jobs Act of 2017. For example, a meal at a restaurant with a client where business is discussed can be deducted at 50%, but tickets to a sports event cannot be deducted, even if business is discussed. Meals provided at a company event or for the convenience of the employer may be 100% deductible under certain conditions.

Where to Put It on the Tax Form

Schedule C, Line 24b

Real World Example

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

Calculation Required

A calculation is required for this deduction.

To calculate the deductible amount for meals, multiply the total cost by 50%. For example, if the meal cost is $100, the deductible amount is $100 x 0.50 = $50.

Audit Risk & Documentation Tips

Moderate audit risk. Keep detailed records such as receipts, the names of the people involved, the business purpose of the meal, and notes on what was discussed. Use a logbook or digital app to track these expenses consistently.

IRS Reference

IRS Pub 463, IRC §162

Relevant Industries

FreelancersConsultantsReal Estate AgentsSmall 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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