Are Luncheon Business Meetings Tax-Deductible?

Discussing business over lunch can be both productive and enjoyable.

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One of the common ways to make sure your business customers, contacts and colleagues are appreciated is having lunch together. Whether you are dining one on one or in a larger group, you can deduct business lunches from your personal income tax returns when the meal is for business purposes and you did not receive any reimbursement or advance to pay for it.

Lunch at the Business Location

Hosting customers, potential clients and others related to your business or industry can be deducted on your individual income taxes when the event is hosted on site at your business location. The lunch, either catered or delivered, can be deducted as long as you did not receive employer reimbursement for the money spent. For personal income taxes, business lunches hosted in the office are deductible as an un-reimbursed employee expense at a rate of 50 percent. For example, you paid for lunch to discuss a new contract with a client. You personally paid for, and did not expense, the catered lunch, which cost $100. You can deduct $50 from your taxes as an un-reimbursed business expense.

Lunch Out in a Restaurant

Taking business clients and contacts out for lunch is a common practice. You can choose to be fully reimbursed by your company for the cost of the meal or to save the receipts and deduct the lunch on your personal income taxes to help lower your taxable income and thus your tax liability. Make notes on all lunch receipts to clearly state who attended the lunch and what was discussed to help verify the lunch was for business purposes.

Group Lunches and Events

Business luncheons where a large group of business professionals gather to hear speakers, network or partake in other business endeavors sometimes cost money. If you have attended such a lunch that had a specific and verifiable business purpose, and you paid for the lunch or admission to the event on your own, you can deduct half the meal on your taxes. One caveat to this rule is if lunch is included in a larger fee associated with the event, such as admission to a trade show or conference. In such a situation, you can deduct the entire cost of the event, including the lunch portion of the fee, as an un-reimbursed educational or training expense.

Lunch in Your Home

If you have hosted a business lunch in your home, you can deduct the same 50 percent of the total amount spent for the event if you can prove that those in attendance are beneficial to your line of work or your business. Keep notes of who attended and what was discussed and retain all receipts.