If you have a business and you eat, you’re probably eligible for business tax deductions, at least some of the time. Here are four ways your meals — and your coffee — might be tax deductible.
#1: You put together an event that includes a meal.
Let’s say you organize a day-long seminar. As part of the tuition, you furnish lunch. In that case, 100% of the cost of the meal is deductible.
#2: The meal is part of a sporting (or other type of entertainment) event.
If you do business before and/or after the event, the cost of the event is deductible. The food expense is deductible as well.
#3: You take out a business associate, vendor, employee, client, prospect, or other person associated with your business.
This is the most common meal deduction taken, although it’s only 50%. If you spend $100 taking a prospect out to lunch, you’ll only be able to take a deduction for 50% of the cost. As with all of the other deductions, you’ll need to be able to prove the business purpose, and that you actually paid for the expense with a receipt of some kind.
#4: You have a meal for benefit of the business at the business’s location.
The wording is awkward, but that’s how the IRS describes the best way to write off 100% of your meal expenses. If you have a meal at your place of business (and that could be your home office) and it’s for the benefit of the business, such as with a meeting or while you’re working at your computer, the cost is 100% deductible.
Pick up a latte and bagel and check your email. It’ll be 100% deductible! Hire a personal chef to come into your home office three days a week to make gourmet, healthy meals for your lunch meetings with your assistant, and it’s 100% deductible.
Of course, you need to have a business to get the deduction and you need to have good records that prove the meal had a business purpose and that you actually paid for the expense.
For other tips and advice on tax deductions contact us at mcdaccginc.com for more info.