What makes a lunch "business"?
A deductible business lunch requires:
- A business purpose: discussing a project, negotiating a deal, networking with a potential referral partner
- A business associate: client, prospect, vendor, partner, colleague (not your spouse, unless they have a legitimate business role)
The meal doesn't need to result in a signed contract. A genuine business conversation is enough.
Solo meals: usually not deductible
Eating lunch alone at your desk or grabbing a sandwich between meetings is a personal expense — not deductible. Exceptions:
- You're traveling away from your tax home overnight (travel meal rules apply)
- You're working late and the meal is an ordinary and necessary business expense (rare, mainly for employers providing meals to employees)
What to document
For every business meal, record:
- Amount — keep the receipt
- Date and location
- Who attended and their business relationship to you
- Business purpose — what was discussed
A quick note on the receipt or in your expense tracker is sufficient. The IRS doesn't need a transcript of the conversation.
You take a potential client to lunch to discuss a web design project. The bill is $75.
Deduction: 50% × $75 = $37.50
Your note: "Lunch with Sarah Johnson (Acme Corp) — discussed website redesign proposal, timeline, and budget."
See IRS Publication 463, Chapter 2 (Meals and Entertainment). Report on Schedule C, Line 24b. Meals must not be lavish or extravagant.
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