Can Meals Be Written Off For Restaurateurs?
Meals are a typical business expense, even for restaurateurs who constantly deal with food day in and day out. Most business owners already know that expenses for some foods and beverages can be deducted from taxable income.
But can meals be written off for restaurateurs?
The good news is they can be, but not all of them.
If you are a restaurant owner and operator, you may write off meals and lower your tax liability. Some business meals can be written off 100%, others are 50% deductible, and others aren’t eligible. Although this may sound simple, categorizing business meal write-offs can be challenging. This article will help you and other restaurateurs avoid problems when you file taxes with the Internal Revenue Service (IRS) by clarifying which meals can be written off.
What are Tax Deductible Meals?
The tax code frequently lumps meals and entertainment costs together. A meal write-off enables you to claim a percentage of work meals as a corporate expense, even if entertainment costs are typically not deductible.
Taxpayers save money on their tax bill when they deduct the cost of the meal from their taxable income. You are eligible for a tax deduction if your meal qualifies. You can deduct either 50% or 100% of the meal’s expense, depending on its type.
What Types of Meals are Eligible?
Sadly, it’s not as easy as using your corporate credit card to pay for a meal and deducting it. When claiming a meal write-off, there are a few stringent guidelines to follow. The following guidelines must be followed for a meal to qualify as deductible:
- The meal must have a business purpose.
- The business owner or an employee must be present at the meal.
- The meal must be appropriate given the situation and facts, neither extravagant nor lavish.
- A travel meal is only eligible when you have to stop and rest/sleep as part of your work when traveling far from home.
- Meals are paid through a business account
Meals and Entertainment Deduction in 2025
You’re not the only one who finds it difficult to stay on top of the ever-changing tax laws. A comprehensive reform of the U.S. tax code was launched in 2017 by the Tax Cuts and Jobs Act (TCJA). It brought with it new regulations for meals and entertainment.
During the pandemic, a temporary rule as part of the Consolidated Appropriations Act permitted a 100% write-off of the meals bought from restaurants in 2021 and 2022. It was signed into law on December 27, 2020.
However, on January 1, 2023, the provision came to an end, and the TCJA standards once again applied to business dinners. This means that from 2023 onwards, meals purchased from restaurants are no longer 100% deductible. The classification of various business meal and their deduction methods was one of the modifications brought about by the Tax Cuts and Jobs Act:
|
Expense Type |
Deduction |
|
Entertaining clients (sporting events, concerts, etc.) |
0% |
|
Business meals with clients |
50% |
|
Office snacks and meals |
50% |
|
Meals during business travel |
50% |
|
Office Party Meals or team-building events |
100% |
|
Meals & entertainment (included in compensation) |
100% |
Examples of 100% and 50% Deductible Meals
The following are typical instances of meals that are 100% deductible:
- A company-wide holiday party
- Free food and beverages offered to the general public.
- Meals that are part of taxable compensation to employees.
- Treating at least half of the total number of employees to a meal.
These are a few of the most typical meals that are 50% deductible:
- A brunch with a client to discuss business.
- Meals at a conference that’s beyond the cost of admission.
- Employee meals when traveling.
- Treating some of the employees to a meal.
- Board meeting food.
- Meals for employees who are working late.
What are Non-Deductible Meals?
The majority of meals you purchase for work are either fully or partially deductible. There are, however, certain exceptions. For instance, it is not deductible if you pay for your clients’ dinner but do not accompany them. The same is true for client meals at restaurants where you invite spouses or friends; you can write off half of the client payment, but the cost of your friends is not deductible.
You also cannot claim a business meal deduction if you eat lunch while driving to a client’s location, even if it took place during working hours. This is because the meal did not serve any business purpose, like attracting new clients.
Common Mistakes When Writing Off Meals
Not maintaining enough records is the worst error to avoid when it comes to the meal write-off. In the case of an audit, your claim to the deduction may be deemed invalid if you fail to document relevant details regarding the meal.
Trying to write off meals that don’t qualify is another frequent mistake. Make sure all meals you declare have business purposes. Also, keep in mind that meals related to travel expenses are only deductible if they are a part of a longer trip that necessitates a significant stop for rest or sleep.
Final Thoughts: Can You Deduct Meals as a Restauranteur?
Can meals be written for restaurateurs? Of course, but not all meals, as mentioned in this article. You can save money every tax year by taking advantage of meal write-offs, particularly if you have frequent client meetings.
But before you file for your income taxes, it is best to consult with a restaurant tax expert, like the team at U-Nique Accounting if you have any doubts concerning meal write-offs.
We help restauranteurs like you minimize your tax burden, and pay as little tax as legally possible to Uncle Sam.
If you’re in search of a better restaurant accountant, use the calendar below to Get in Touch. We’re always here to help.
Until next time!
By MATT CIANCIARULO
