How to Deduct Business Meals in 2023: Ultimate Guide (2024)

Many freelancers and small business owners believe that, in order for a lunch to count as a"business meal", it needs to come with a white tablecloth and a French waiter serving you le plat du jour. Not true.

All types of self-employed people — not just consultants and salespeople — should be claiming business lunches. The key is to know what counts.

In this guide, we’ll cover everything you need to know about writing off meals — what to claim, what to avoid, and how to keep records.

What counts as a "business meal"?

The 2017 Tax Cuts and Jobs Act has left some folks confused about the rules of deducting business meals. The truth is, there are no new restrictions on business meals.

What got cut was client entertainment expenses — think concert tickets, or a round of golf. Meals are still tax-deductible.

Now that we've gotten that out of the way, let's talk about how to take that deduction. The IRS guidance on business meals notes that “the food and beverages" must be "provided to a current or potential business customer, client, consultant, or similar business contact.”

There's some ambiguity in the phrase “similar business contact”. So we'll breaking down what counts — and what doesn't.

✓ Taking a client out for lunch

This one’s obvious. If you go out for lunch with a client, work will come up in the discussion. You don’t even need to pay for the other person’s meal.

✓ Wooing a prospective client

Building and maintaining your network is critical to maintaining your business. Past coworkers and friends in similar industries could all eventually turn into prospective clients -- or introduce you to one.

You don’t need to sign contracts at the table for lunch with them to count as a business meal.

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✓ Business meal with a coworker

Going out with a business colleague with the express goal of discussing business is deductible. Just make sure to keep notes of your conversation.

✓ A networking opportunity

Don't miss out on this one! It's very important to stay on top of the latest news and trends in your industry.

Meeting with other professionals to network or swap tips is a great way to grow your business. After all, most people get referrals from someone they already know! Just make sure to keep notes of your conversation.

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In case of an audit, you'll want to make sure to keep some record of what was discussed. A follow-up email or notes will do.

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What doesn't count as a business meal?

Unfortunately, you can't deduct all the food that you consume on the job. These examples may seem like no-brainers, but they're not actually qualified deductions.

✘ Snacking while working

Rule of thumb: if eating on the job is not a requirement for employment, then it's not a deduction.

Say you’re a security guard on a 1099 contract, and you’re not supposed to leave your post all day. In that case, the snacks you buy are tax-deductible.

If you’re merely a busy professional trying to save time between meetings, consider it a personal expense.

✘ Stocking your home office with groceries

Sorry, folks. It’s very unlikely that your grocery bill is a tax deduction — even if you're outfitting a home office.

✘ Grabbing a solo lunch

Getting lunch by yourself doesn't count as a business meal, even if you hop on a call at the cafe. This includes getting a coffee while working at your local coffee shop.

Rule of thumb: If you’re alone, it’s not deductible.

The temporary 100% deduction for restaurant meals

Ready to wine and dine your clients? Here's one special consideration to keep in mind: In the 2022 tax year, any business meals you get at restaurants are 100% tax-deductible.

Everyone’s calling this the “three-martini lunch” tax break. It's actually part of the Consolidated Appropriations Act of 2021, which bundled together a number of COVID relief measures. The thinking was, this tax break would help restaurants gutted by the pandemic.

Before, business meal deductions were capped at 50%.

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Keeping records for your business meals

It's good to keep records of your business meals in case of audit. This is an expense category often scrutinized by the IRS so it's best to keep notes on your business meals using a platform like Keeper.