The meals deduction

Business meals are 50% deductible. irs.gov The temporary 100% restaurant deduction ended after 2022, and entertainment is not deductible at all.

Both halves of that sentence are still contradicted by a large amount of advice online, because the 100% rule was real for two years and the pages written during it were never updated.

What the 50% actually returns

A meal is already worth less than it looks, because only half of it is deductible. Then the deduction itself is worth less than the bracket suggests.

The saving on the deductible half follows the ordinary business-expense arithmetic, which is the same for any Schedule C spend:

Net profit	As a business expense	As a Schedule 1 adjustment	The adjustment is worth
$40,000	$23.05	$9.60	42%
$60,000	$23.05	$9.60	42%
$100,000	$30.49	$17.60	58%
$150,000	$30.49	$17.60	58%

So a $200 dinner costs about $170. That is a discount, not a subsidy, and it is the number to have in mind when somebody says a meal is “on the business”.

The line that matters is meal against entertainment

Entertainment stopped being deductible in 2018 and has not come back. irs.gov The distinction is not about how much fun the event was — it is about what was purchased.

That last case is where the money is actually lost. A venue that prints one total for a hospitality package has converted a deductible meal into a non-deductible entertainment expense, and the fix is at the point of purchase — asking for the food itemised — rather than at the point of filing.

What the records have to show

Four things, and the requirement is that they be contemporaneous rather than reconstructed: irs.gov

• When — the date
• Where — the establishment
• Who — the business contact present
• Why — the business purpose

The receipt covers the first two on its own. The other two exist nowhere unless somebody writes them down — a line in a bank feed reading “lunch” and an amount is not a record of who was there or why.

The practical version is a note on the phone at the table, or a line in the accounting app while the receipt is still in your hand. It takes ten seconds and it is the entire difference between a deduction that survives a question and one that does not.

The cases people get wrong

Eating alone while travelling is deductible. It does not require a client — a meal on a genuine business trip away from your tax home qualifies at 50%. irs.gov

Eating alone while working is not. Lunch at your desk, or at a café you work from, is a personal expense no matter how much work happened. There is no business purpose distinct from being a person who eats.

A meal with another freelancer is a judgement call, not a rule. If the conversation is genuinely business — a referral, a collaboration, a rate negotiation — it qualifies and the record should say which. If it is a friend who happens to do similar work, it does not, and calling it business in the note does not change what it was.

Coffee counts. Nothing in the rule sets a floor. irs.gov A coffee with a prospect is a 50% deductible business meal carrying the same four record requirements as a long dinner — which is exactly why most people do not bother. Below a certain size the record costs more than the deduction is worth.

The honest summary

This is a small deduction that consumes a disproportionate amount of attention. At the numbers most solo operators are working with, a year of diligent meal tracking is worth a few hundred dollars, and the same hour spent on whether the home office is being claimed correctly or on the retirement contribution is worth considerably more.

Track them because they are yours, not because they will change the year.