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What Meals Are Tax Deductible for Businesses?
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Business meal expenses are tax deductible, but the deductibility percentage depends on the purpose and nature of the meal. According to IRS rules, business meals can be categorized as 0% deductible, 50% deductible, or 100% deductible.

0% Deductible Meals

Certain meal expenses are not deductible at all for businesses. These include meals during entertainment activities such as sporting events, theater, or golf games with clients or customers, even if business is discussed. Club memberships and related expenses are also not deductible. Additionally, any meals that are considered lavish or extravagant are not eligible for deduction.
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50% Deductible Meals

Most business meals are 50% tax deductible. This includes:
  • Meals directly related to business meetings with employees, stockholders, agents, or directors
  • Meals with clients, customers, and vendors that benefit the business
  • Employee meals while traveling for work, attending seminars, conventions, or other business meetings
  • Office snacks like water, coffee, and food items
  • Treating a few employees to a meal, unless it's at least half of all employees
  • Meals provided by an in-house cafeteria for the convenience of the employer
To claim the 50% deduction, meals must have a clear business purpose, not be lavish or extravagant, and be properly documented with receipts, attendees, and the business relationship.
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100% Deductible Meals

Certain meals are fully tax deductible for businesses. These include recreational events primarily for non-highly compensated employees, such as holiday parties or company picnics. Office snacks and meals provided on the employer's premises to more than half of employees working late or on weekends are also 100% deductible. Other fully deductible expenses are meals made available to the public for advertising purposes, reimbursed meal expenses, meals included as taxable employee compensation, and meals provided during employee award or incentive trips.
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Summary of Deductibility

Here is the content for the "Summary of Deductibility" section: In summary, business meals can be categorized as 0% deductible for entertainment-related meals, club memberships, and lavish expenses; 50% deductible for most business-related meals, including those with clients, during travel, and office snacks; and 100% deductible for employee recreational events, meals for employees working late, meals provided to the public, and meals included as taxable compensation. To ensure accurate tax planning and compliance, businesses should maintain proper documentation and separate meal expenses into appropriate categories in their general ledger.
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