Deducting Meals as a Business Expense

How the Rules Can Affect Your Business Taxes

image shows three images: two men in suits talking over coffee, a pile of receipts, and a calculator. Text reads: "Taking deductions for meal expenses: make sure the meals are legitimate business expenses; save documentation of the meal (receipts); deduct the full costs or 50% of the costs"

Theresa Chiechi / The Balance

Taking your customers, vendors, or potential employees out for a meal and maybe some entertainment is a great way to build your business, and meals and entertainment for business purposes are a legitimate business tax deduction. But there are limits to what you can deduct. Entertainment costs aren't deductible, while some meal expenses are taxable to employees.

Key Takeaways

  • Most meals are deductible at 50% after Dec. 31, 2022.
  • Entertainment expenses are generally not deductible.
  • The business owner must be present, and the meal can't be "lavish or extravagant."
  • The cost of some meals provided to your employees can be taxable to them if they're considered to be fringe benefits.

What Are Business Meal Expense Deductions?

Business meals are deductible business expenses, and most meals are deductible at 50% of the cost. But entertainment expenses are not deductible as a business tax expense.

There was a temporary exception to the 50% limit on deductions for food or beverages from Jan. 1, 2021 through Dec. 31, 2022, Your business could deduct business meals at restaurants and bars at 100% during this time. The facility must have prepared and sold food or beverages to retail customers for dining in or take-out, and the business owner or an employee had to be present.

This increased deduction couldn't be taken for grocery stores and convenience stores. or at employer-operated eating facilities.


The 50% limit applies to your customers, clients, vendors, and employees, including meals that are part of business travel or at business conventions or professional meetings.

Qualifying for Meal Expense Deductions

Your business can generally deduct the cost of business meals at 50% beginning in 2023 or for tax years prior to 2021 if:

  • The business owner or employee is present.
  • The cost of the meal or beverages isn't "lavish or extravagant."
  • The meal is with a business contact (such as a customer, employee, vendor, or consultant).
  • The meal has an "ordinary and necessary" business purpose.

Entertainment is not deductible, so you can only deduct meal costs at entertainment events if the cost can be separated, like a catered meal delivered to a skybox at a sporting event and invoiced separately.

Meals Deductible at 100%

Some meal and entertainment expenses can be fully deducted. Your deduction doesn't have to be limited to 50% on these activities: 

  • An event to promote goodwill in the community, like sponsoring a community event (considered to be advertising or marketing)
  • An event at which the proceeds go to a charitable organization (check to be sure the charity meets Internal Revenue Service (IRS) qualifications)
  • The meal is an essential part of your business function, (such as if you're a restaurant critic, food blogger, or sports reporter)

Meal Expenses You Can't Deduct

You may not deduct the cost of meals for personal reasons, even while traveling. But most expenses will be considered business expenses if the trip is "primarily" business. Only those costs directly related to the business you conduct may be deductible if the trip is "primarily" personal and you conduct just minimal business.

Deducting Some Business Meals for Employees

Your business can deduct the cost of meals for employees while traveling and for meals with clients or customers at 50%, but you can take a 100% deduction for some meals provided to employees, including:

  • Meals with value that you include in an employee's wages
  • Meals as part of social events, such as a holiday party or an annual picnic
  • Meals for employees at your location, such as your company's cafeteria or break room

Meals for Employees As Fringe Benefits

Some meals you give to your employees are considered benefits, so they're taxable to the employees. You must report these benefits on their W-2 forms. Some of these meal benefits must be included in the wages of key employees or highly compensated employees (5% share owners or individuals paid more than $125,000) unless the benefits are available to all employees or a group of employees that doesn't favor the highly compensated individuals.

De Minimis Rules

You don't have to include the cost of meals to employees if these costs are small or "de minimis" in tax terminology. This would be the case with coffee and donuts provided at a meeting or an occasional meal for an employee who is working overtime. The de minimis rule also applies for employee meals at your company cafeteria if the annual revenue of the facility is equal to or greater than the costs.

Other Meals for Employees

Employees aren't taxed on the value of meals your company furnishes at your business location and for your business convenience. For example, the meal cost may not be taxable to them if you give meals at your cafeteria to employees who must be available for emergency calls.


"At your convenience" means that your business has a substantial business reason for providing the meals. A written statement in a contract or employee handbook isn't enough to establish business convenience. You may be required to give the IRS specific reasons and documentation.

How To Take Meal Expense Deductions

Taking these meal expense deductions is a three-step process: 

  1. You must verify that these expenses are legitimate business expenses. Some of these expenses are deductible, while others may not be.
  2. You must have documentation to back up the deduction. You don't have to include these documents with your business tax return, but you'll need them in case of an audit
  3. You must determine if you can take the full amount as a deduction or if the amounts are subject to the 50% rule. Remember that meals at restaurants, bars, and other eating establishments were temporarily deductible at 100% through 2021 and 2022.

You can determine meal costs in one of two ways:

  • Using actual costs for meals
  • Using a standard IRS meal allowance


You must keep receipts and track actual costs with either method.

Sole proprietors and single-member LLCs show these expenses in the Expenses section of Schedule C on line 24b.

Partnerships and multiple-member LLCs report them in the Deductions section of Form 1065, the partnership tax return.

C corporations enter them in the Deductions section of Form 1120, the corporate tax return. S corporations show these expenses in the Deductions section of Form 1120S.

You can use per diem rates for figuring travel expenses within the U.S. The General Services Administration (GSA) updates per diem rates each year. This US-GSA page provides each year's rates.

Frequently Asked Questions (FAQs)

What documents do I need to prove a business meal expense?

You must have what the IRS calls "adequate evidence." This means a receipt from the place where the meal took place. A canceled check isn't enough. Make sure the receipt includes the name and address of the establishment, the date of the meal, the number of people served, and the amount of the expense. Add the names of everyone dining with you and their relationship to your business and business purpose to the bottom of the receipt.

What if I don't have the documents to prove a meal expense?

You may need to give an oral or written statement with specific information in addition to other supporting evidence if you don't have complete records. You may also be able to get acceptable proof by sampling, with records for part of the year used to prove similar situations for other parts of the year. For example, you might not have to show every receipt for the whole year if you take a specific client to lunch every month. You may be able to prove a deduction by reconstructing your records or expenses if your records were lost or damaged in circumstances beyond your control, such as in a disaster.

What's a reasonable amount for a business meal deduction?

The IRS doesn't restrict the cost of a business meal to a specific amount, even if it's at a deluxe restaurant or a resort. But meals can't be "lavish or extravagant." This is taken on a case-by-case basis looking at whether the meal cost is reasonable based on the facts and circumstances.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. IRS. "Publication 535: Business Expenses."

  2. IRS. "Treasury, IRS Provide Guidance on Tax Relief for Deductions for Food or Beverages From Restaurants."

  3. IRS. "Publication 463 Business Travel, Gifts, and Car Expenses."

  4. IRS. "Publication 15-B: Employer's Tax Guide to Fringe Benefits."

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