Are Meal Expenses Fully Deductible?

Meals that are purchased for work or business purposes can either be fully deductible, or only 50% deductible depending on what the meals are for and a few other requirements.

50% Deductible

During meetings, meals purchased for employees, stockholders, directors, agents and other business personnel are deductible at 50% of the actual cost of the expense. This includes meetings held at the office or partner meetings. Note: If the meal is not business-related, then none of the expenses are deductible.

Meals taken while traveling for business are also 50% deductible. If some of the trip is taken for personal reasons, and meals are consumed during that portion of the trip, they are not deductible.

Work-related conventions, seminars, and other types of meetings that do not separate the cost of meals from the cost of the event can still contain deductible expenses. The taxpayer can determine the amount of the deduction, based on reasonable amounts or a geographical per diem rate.

Taxpayers who take meals with business associates, for example clients, customers and vendors, can deduct half of the expense if there is a benefit to the business, or business was conducted during the meal.

If an employer reimburses an employee for meal expenses, the employer can still only deduct the expense at 50%, even though the full amount was paid to the employee.

100% Deductible

Meals purchased for a company picnic or holiday party can be fully deducted at tax time.

Coffee, snacks, bottled water, donuts, soda, and other similar items provided for employee consumption in the workplace are also 100% deductible.

During promotional events or campaigns, food offered to the public for free can be deducted fully.

Employer provided meals offered as an incentive to employees to keep them on the premises, working late or on call, or to entice workers to come in on weekends can be 100% deducted on the employer’s return, as it is in benefit of the employer to provide these meals.