How to Decide When Business Meals are Deductible
A question you may have come across as a small business owner is if you can write-off meals with family or friends as long as you talk about business. Generally, no, not unless you meet the following requirements:
The person you are discussing business with is an employee of your business.
Legitimate business was discussed and made note of.
The meal is not “lavish or extravagant.”
The amount of times you eat out for a business meal is “reasonable,” as determined by the IRS.
There are no strict guidelines for when meals are too extravagant, or how many times a year is too often to take your spouse for a business dinner, so you will have to stay within the boundaries of what you think is reasonable. When you do conduct a business meal, remember to keep receipts for these meals if they are over $75, to make a record of what business topic is discussed, and take note of the name of the person you're with.
Contact AMJ Bookkeeping for help keeping track of your business expenses.
