That's right! Business meals for employees and clients can be considered tax-deductible! However, there are stipulations you will need to keep in mind as a business owner if you are hoping to claim meals as a tax write-off. Here are some questions to keep in mind:
What was the purpose of the meal?
Who benefits from the meal?
Below is a list of the purposes for having meals and the percentage of the deductible you are allowed to gain from these purposes.
Meals and entertainment expenses -->100% deductible
Company-wide party --> 100% deductible
Business meals with clients --> 50% deductible
Office snacks and meals --> 50% deductible
Entertaining clients --> 0% deductible
To take it one step further, there are eligibility requirements that the business owner must meet in order to gain any tax deductibles this tax season. Here is a list of eligibility requirements:
The expense must be reasonable and not extravagant or excessive.
The taxpayer or an employee must be present.
The meals must be served to a current or potential business customer, consultant, client, or similar business contact.
If the meal is provided at an entertainment activity, it must be purchased separately from the activity itself.
Example deductions include meal expenses while traveling on business, reasonable food and beverage spent on social company activities, including holiday parties and happy hours.
All in all, business meals can definitely be considered as tax-deductible as long as they meet the requirements that were touched on earlier in this blog. Keep up-to-date on this and other tax deductions you may qualify for!
Check out the link below for a list of other tax deductions you can claim this tax season!
What questions do you have about tax season? We are here to provide help with tax preparation, accounting, payroll management, and business formation! R&I Tax and Bookkeeping is here to help! You may contact us via our 'Contact' page at https://www.ritbsinc.com/contact. We can also be reached via phone at 253-777-1106. Happy Holidays!
Osterhaus, E. (2021, February 1). Complete list of small business tax deductions (2021). QuickBooks. Retrieved December 16, 2021, from https://quickbooks.intuit.com/r/taxes/small-business-tax-deductions/