Meal Deductions, Explained

Reviewing Documents over coffee

One of your employees announces that she’s engaged, and you take her and the office out to lunch to celebrate. In the evening, you take out your business partner to celebrate the company’s one-year anniversary.

Both of those count as business expenses, but at tax time, you handle them differently. The employee meal is 100% deductible, while the partner one is 50%.

Confused? Don’t worry, so are we. Accountant Anita Cziraki tells us that most M&E (meal and entertainment) deductions are limited to 50%. That includes meals during business travel and meals with clients.

But there are some exceptions. On-site meals provided to employees working overtime are 100% deductible, as is food for a company picnic or party.

To make the best move at tax time, check out this easy-to-understand guide.

Check box. How do you keep track of your tax-deductible M&E expenses?