DEDUCTIBLE MEALS

& ENTERTAINMENT

You can no longer take a deduction for any expense related to activities generally considered entertainment, amusement, or recreation. You can continue to deduct 50% of the cost of business meals if you (or your employee) are present and the food or beverages aren't considered lavish or extravagant.

MEALS:

Meal deductions must be directly related to business to be tax-deductible.

Here's a breakdown:

Business Purpose:

• The primary purpose of the meal must be to conduct business.
• This could include client meetings, business negotiations, entertaining potential clients, or discussing business matters with employees or colleagues.
• Casual meals with no direct business purpose are generally not deductible.

Key Considerations:

·         Documentation: You must maintain proper documentation to support the business purpose of the meal. This typically includes:

• Receipts from the restaurant
• Dates, times, and locations of the meals
• Names of individuals present at the meal
• A brief description of the business purpose of the meal

·         50% Limitation: For most business meals, only 50% of the cost is deductible.

For more information refer to the IRS at: https://www.irs.gov/publications/p463#en_US_2023_publink10009969

Under MEALS

ENTERTAINMENT

Entertainment—Defined

Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation. Examples include entertaining guests at nightclubs; at social, athletic, and sporting clubs; at theaters; at sporting events; on yachts; or on hunting, fishing, vacation, and similar trips. Entertainment may also include meeting personal, living, or family needs of individuals, such as providing meals, a hotel suite, or a car to customers or their families.

For more information refer to the IRS at: https://www.irs.gov/publications/p463#en_US_2023_publink10009969

Under ENTERTAINMENT. 

TRUCK BUSINESS MEALS EXPENSES

Truck drivers have unique tax deductions related to their work, including meal expenses. Here's a breakdown:

1. Per Diem Allowance:

·         Simplified Method: Truck drivers can use the per diem rate set by the IRS to deduct meal expenses.

·         2024 Rates: For 2024, the per diem rate for travel within the continental U.S. is $69 per day.

o    Important: You can only deduct 80% of the per diem rate for meals.

·         Convenience: This method simplifies record-keeping as you don't need to track every meal expense.

2. Actual Expenses:

·         Track Every Meal: If you choose this method, you must meticulously track the actual cost of every meal you purchase while on the road.

·         Record-Keeping: Keep receipts for all meals and maintain a detailed log of your travel expenses.