1. Ordinary and Necessary Business Expense:

   • To qualify for a tax deduction, the business meal expense must be both "ordinary and necessary" in the course of your trade or business.

2. Directly Associated or Associated with Business:

   • The meal must be directly associated with the active conduct of the trade or business, or it must be associated with the active conduct of the business, meaning there is a clear business purpose.

3. Substantiation Requirement:

   • Proper documentation is crucial for tax deductions. Keep detailed records, including receipts, documenting the amount, date, location, business purpose, and attendees of the meal.

4. Entertainment vs. Meals-Only:

   • Expenses for entertainment, amusement, or recreation are generally not deductible. However, business meals that are not lavish or extravagant and are directly associated with the active conduct of the business may be deductible.

5. 50% Limitation:

   • The tax deduction for business meals is subject to a 50% limitation. Only 50% of the expenses incurred for business meals are deductible.

6. Employee Meals:

   • Meals provided to employees for the convenience of the employer can be deductible, but the 50% limitation still applies.

7. Client and Customer Meals:

   • Business meals with clients or customers are generally deductible if there is a clear business purpose and the 50% limitation is met.

8. Business Meetings and Conferences:

   • Meals provided during business meetings, conferences, or seminars are usually deductible if there is a clear business purpose.

9. Travel Meals:

   • Meals incurred while traveling for business purposes are generally deductible, subject to the 50% limitation.

10. Recordkeeping:

    • Maintain thorough and accurate records. This includes documenting the business relationship or reason for the meal, the nature of the discussion, and the specific business benefit.

11. No Lavish or Extravagant Meals:

    • The IRS may scrutinize and disallow deductions for lavish or extravagant meals. It's important to keep expenses reasonable and directly related to the business purpose.

 

Tax laws can change, and it's advisable to consult with a tax professional or accountant for the most up-to-date and accurate information regarding business meal tax deductions. Additionally, keep abreast of any changes in tax regulations or laws that may impact the deductibility of business meal expenses.