Business Meals (50% Deductible — Schedule C Line 24b) — United States Tax Rules

Deduct 50% of documented business meals with clients, prospects, or colleagues — must have a clear business purpose recorded at the time.

Claimable: Partially claimable · Tax authority: IRS (Internal Revenue Service)

IRS (Internal Revenue Service) Rules

• Business meals are 50% deductible under IRC §274(n) — the deduction is limited to 50% of the actual cost.
• Requirements: (1) The meal must have a direct business purpose — discussing a contract, project, or business relationship. (2) The business person must be present. (3) Document: date, amount, business purpose, and name/relationship of each person present.
• NOT deductible: meals with no documented business purpose, personal meals, client meals where you cannot recall the specific business discussion.
• Deductible examples: lunch with a client to discuss project scope; coffee with a prospect; team dinner after a client kick-off.
• NOT deductible: entertaining clients at sporting events (entertainment disallowed since 2018 TCJA), personal meals while working from home.
• Meals at conferences and professional events: 50% deductible.
• Record-keeping rule: IRS requires you to document meals at the time (or shortly after) — not months later.

Limits

50% deduction limit applies to the cost of food and beverages. Entertainment costs (sporting events, concerts) are 0% deductible since TCJA 2018.

Worked Example

David, a freelance consultant, takes a client to lunch to discuss a new contract. The total bill is $120. He photographs the receipt and notes: 'Lunch with Sarah Chen, VP at Acme Corp, to discuss Q1 2025 retainer scope.' His deductible amount: $120 × 50% = $60. He enters $120 as the expense on Schedule C and deducts only $60 (the 50% limitation is built into Line 24b).

Record Keeping

• Record the date, restaurant name, amount, business purpose, and names of all persons present
• Photograph or scan the receipt immediately — write the business purpose on the back
• Use an expense tracking app (Expensify, Zoho Expense) to capture meal receipts in real time
• Keep a separate log of business meals — IRS Form 4562 instructions require contemporaneous records

Frequently Asked Questions

Can I deduct 100% of meals during a business trip?

No — meals during business travel are still subject to the 50% limitation. Whether you're eating at a client lunch or during a work trip, only 50% of meal costs are deductible.

Are meals while working from home deductible?

No — meals you eat while working from home (even at your home office desk) are personal expenses and are not deductible. Only meals with a documented business purpose and another party present qualify.

Is client entertainment (sports tickets, concerts) deductible?

No — the Tax Cuts and Jobs Act (TCJA 2018) eliminated the entertainment deduction. Client entertainment at sporting events, concerts, and other entertainment venues is 0% deductible, even if there is a business purpose.