Understand the current IRS rules for deducting expenses,

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Taking clients to lunch, buying dinner during business travel, or meeting prospects over coffee are common business practices—but are these expenses tax deductible? The rules for deducting business meals and entertainment have changed significantly in recent years. Understanding current IRS regulations can help you claim legitimate meal deductions while avoiding costly mistakes that could trigger an audit or result in denied deductions.

Current Rules for Business Meal Deductions

As of 2025, business meals are generally 50% deductible when they meet specific IRS requirements. This means if you spend $100 on a qualifying business meal, you can deduct $50 as a business expense.

Entertainment expenses, however, are no longer deductible. The Tax Cuts and Jobs Act eliminated deductions for entertainment, amusement, or recreation expenses starting in 2018. This includes tickets to sporting events, concerts, golf outings, theater performances, and similar activities, even when conducted with clients or for business purposes.

The key distinction is between meals (50% deductible) and entertainment (not deductible). Understanding where the IRS draws this line is essential for claiming proper deductions.

What Qualifies as a Deductible Business Meal?

For a meal expense to be deductible, it must meet three primary requirements:

The expense must be ordinary and necessary for your business. This means the meal should be common and accepted in your industry and helpful for conducting business. A lunch meeting with a client to discuss a project qualifies; a five-star dinner with no business purpose does not.

The expense cannot be lavish or extravagant under the circumstances. The IRS doesn’t define specific dollar amounts, but the meal cost should be reasonable given your industry, location, and business purpose. A $200 steak dinner might be reasonable for closing a major deal but excessive for a routine weekly check-in.

You or an employee must be present at the meal. You cannot simply pay for a client’s meal while you’re not there and claim a deduction. At least one person from your business must attend.

Additionally, the primary purpose of the meal should be business-related. While some personal conversation is expected during business meals, the overall purpose should be conducting business, discussing work matters, or building client relationships.

Types of Deductible Business Meals

Several categories of business meals qualify for the 50% deduction:

Client and prospect meals where you discuss current projects, pitch new business, or maintain business relationships are deductible. This includes breakfast, lunch, dinner, or coffee meetings with customers, clients, or potential clients.

Meals during business travel are deductible when you’re away from your tax home overnight on business. This includes meals during conferences, sales trips, client visits, or other business travel. You can deduct actual meal costs or use the standard per diem rates set by the IRS.

Meals with business associates such as vendors, suppliers, contractors, consultants, or professional advisors are deductible when discussing business matters. A lunch with your accountant to discuss tax planning or dinner with a supplier to negotiate terms qualifies.

Employee meals during business activities such as working lunches, overtime meals, or meals during off-site business meetings may be deductible. The rules vary based on circumstances, so documentation of the business purpose is important.

Meals at business conferences and seminars are typically deductible as part of your overall business education expenses. Keep receipts separate from the conference registration fee to properly categorize these costs.

What About the 100% Deduction for Certain Meals?

Some business meals qualify for 100% deduction rather than the typical 50%:

Office snacks and meals provided to employees for the convenience of the employer may be 100% deductible. This includes coffee and refreshments in the office break room, meals during required overtime, or food provided at company events.

Meals provided at company-wide events such as holiday parties, summer picnics, or annual meetings are 100% deductible when offered to all employees. These are considered de minimis fringe benefits.

Meals included in taxable compensation to employees can be 100% deductible to the employer because the employee pays tax on the value received.

Meals for advertising or promotion purposes, such as free samples given to the public or meals provided at promotional events open to potential customers, may qualify for 100% deduction as advertising expenses rather than meal expenses.

The temporary 100% deduction for restaurant meals that was available in 2021 and 2022 has expired. Business meals are back to the standard 50% deduction limit.

Entertainment Expenses: What’s No Longer Deductible

Entertainment expenses were fully eliminated as deductions starting in 2018. The following are NOT deductible:

Tickets to sporting events, concerts, or shows, even when you take clients or discuss business during the event. The tickets themselves generate no deduction.

Golf outings, bowling, or recreational activities with clients or customers are not deductible entertainment expenses.

Skybox or luxury suite rentals for sporting events or performances generate no deduction.

Country club or social club dues are not deductible, even if you conduct business at these facilities.

However, if you purchase food and beverages separately at an entertainment venue, those meal costs may still qualify for the 50% deduction if they’re separately stated on your receipt and meet the business meal requirements.

Separating Meals from Entertainment

When you attend an entertainment event but purchase food separately, you can deduct 50% of the food and beverage costs if they’re itemized separately on your receipt.

For example, if you take a client to a baseball game and spend $100 on tickets (not deductible) and $40 on hot dogs and drinks (50% deductible, or $20), you can deduct $20. Your receipt must clearly separate these costs.

Always ask for itemized receipts at entertainment venues that break out food and beverage charges separately from admission or entertainment costs.

Documentation Requirements for Business Meal Deductions

The IRS requires specific documentation for meal deductions. You need to maintain records showing:

Amount of the expense, documented with receipts for any meal over $75. For smaller amounts, you can use other records like credit card statements, but it’s best practice to keep all receipts.

Date and location of the meal, including the name of the restaurant or venue.

Business purpose of the meal—what was discussed, what business relationship was furthered, or what business benefit was expected.

Business relationship of the people you dined with, including their names, companies, and connection to your business.

Many business owners use the back of receipts to note these details immediately after the meal, or maintain a meal log in a spreadsheet or expense tracking app. The more contemporaneous your records, the better they’ll hold up under IRS scrutiny.

How to Track and Claim Business Meal Deductions

Create a system for documenting business meals as they occur:

Save all receipts immediately, using a dedicated envelope​​​​​​​​​​​​​​​​