4 Ways to Deduct 100% of Business Meals

Generally, a business owner can take only a 50% tax deduction for the cost of their business meals and entertainment.  However, in the following circumstances a full 100% deduction is allowed for those expenses.

Office Snacks: Coffee, fruits, bottled water, soda, etc. provided to employees at the office.

Office Meals:  Meals provided to more than half of the employees at the place of business at the employer’s convenience.  Examples would include lunch or dinner provided to employee’s to meet a project deadline or to accommodate some special work event.  Pizza lunches for the office during busy times or training work great. 

Employee Parties: Meal and entertainment expenses for a company picnic or holiday party.  That Christmas party in December is a 100% deductible expense.

Promotional Events: Free food or beverages provided to the general public for promotional purposes. This works well for a business sponsoring a table at a conference, park, or another venue where the idea is to promote your business in the community.

Keep in mind deductible meal expense must be reasonable. Keeping good records is important too. The 100% meal expense should be clearly distinguished in your accounting records as something different from "Meals and Entertainment". By creating a separate expense line within your accounting software labeled such as "Meals and Entertainment – 100%" that is reserved just for meals or food that qualifies for the 100% deduction. This will help you to accurately state expense in your Profit & Loss statement and take a full meal deduction when you hand your books to your accountant to prepare your tax return.

Please contact our office should you have any questions.

Alesya Romanovich, CPA

Roeser Accountancy Corporation

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