Few categories cause more second-guessing than meals. The rules changed significantly with the 2017 tax law and have kept shifting since, so it's worth a clear map: some meal costs are 50% deductible, a few are 100% deductible, and entertainment is generally not deductible at all.
The good news for bookkeeping: you don't need to apply those percentages yourself. Record the full cost of the expense in your meals category, keep good notes, and let the deduction math happen on the tax return. What you do need to get right is separating meals from entertainment, and flagging anything personal.
The 50% bucket (most business meals)
The typical business meal is 50% deductible. That includes:
- Taking a client, vendor, or prospect out to eat, where business is discussed and you (or an employee) are present
- Meals while traveling overnight for business — the airport sandwich, the hotel dinner
- Meals at conferences and seminars that aren't included in the registration fee
- Working lunches with your team, ordered in during a genuine work session
The meal can't be "lavish or extravagant under the circumstances." A nice restaurant is fine; the standard is reasonableness, not austerity. You also need the basic substantiation: who attended, the business purpose, the date, and the amount. A one-line note on the transaction — "lunch with Rivera, quoted spring project" — covers it.
The 100% bucket (narrower than you'd hope)
A few situations allow a full deduction:
- Company-wide social events, like a holiday party or summer picnic, that are primarily for the benefit of employees (not just owners and top staff)
- Food provided to the general public as marketing — an open house with refreshments, samples at a market
- Meals you sell to customers, or that are billed to a client and reimbursed under an arrangement where the client takes the deduction
The temporary 100% deduction for restaurant meals expired after 2022 — ordinary client meals are back at 50%, even from restaurants.
The 0% bucket (entertainment, and some newer additions)
Entertainment has been nondeductible since 2018. That means sports tickets, concerts, golf outings, fishing trips, and club memberships — even when the guest is your best client and you talked business the whole time.
There's one useful carve-out: food purchased separately at an entertainment event can still count as a 50% meal. If you take a client to a game, the tickets are nondeductible, but the hot dogs and drinks bought at the concession stand — on their own receipt — can be a business meal. If the food is bundled into the ticket price and not separately stated, the whole thing is entertainment.
Also note a change that took effect in 2026: meals provided on-site for the employer's convenience, and de minimis office food like the snack drawer and coffee service, were 50% deductible through 2025 but are generally no longer deductible starting in 2026. Keep recording them — they're still legitimate business costs for your books — but don't expect a deduction. Ask your tax professional how this applies to you.
What's personal, full stop
Your own lunch on an ordinary workday is a personal expense, even if you eat it at your desk while working. Coffee on the way to your regular office is personal. Meals only cross into business territory when travel, a business companion, or an employee-benefit context is involved.
Practical bookkeeping tips
- Use one meals category and rely on transaction notes to distinguish 50% and 100% situations. Splitting hairs across multiple accounts rarely pays off at small scale.
- When an event mixes entertainment and food, ask for separate receipts at the venue. Future-you will be grateful.
- Record who and why at the moment you categorize the expense. Reconstructing attendee lists in April is miserable and less defensible.
- If a spouse or friend joins a client dinner, their portion is personal — split the transaction.
Meals are one of the most commonly examined categories precisely because they're easy to overstate. Consistent notes and honest splits are your best protection.