Always keep receipts showing amount, date, place, attendees, and business purpose. Document discussions and keep records contemporaneously.

Type 1 - 50% Deductible Meals

• Meals with clients or prospects — must include a bona fide business discussion.

• Meals while traveling overnight for business — includes restaurant or hotel meals.

• Meals during staff meetings or trainings — if primarily for employer’s benefit.

• Occasional overtime meals — if provided for employer’s convenience.

Type 2 - 100% Deductible Meals

• Office parties, company picnics, or staff appreciation events.

• Meals treated as taxable employee compensation (e.g., added to W-2).

• Meals resold to customers (restaurants, caterers, etc.).

• Meals reimbursed under an accountable plan (deductible by the business).

Type 3 - Not Deductible

• Personal meals — including meals with family or friends.

• Meals included with entertainment (unless separately itemized).

• Local meals without a business purpose — routine commuting or errands