Tuesday, December 8, 2009
Meals are considered a business expense under certain conditions. 1st, the meal you are having should be business related where your business is discussed and 2nd it should be with another person. This does not mean a meal with yourself; it has to be with another person. However, if you are traveling away on business then the meal is deductible even if you are only paying for yourself. If you are buying breakfast every morning at McDonalds for yourself that does not count as a business expense. That would be a personal expense. If you buy food for someone else, such as an employee or a client, then that is a business expense. The IRS only allows 50% of the expense to be deducted on your tax return in most cases, so consider that before spending on that lavish meal, it is not 100% deductible. For bookkeeping purposes it is. That is where there is a difference between company books and the tax return for yourself or the company.
There are some other classifications for meals that are expensed under other conditions for people who regularly travel as part of their job which I will not discuss here. However, if you fall under that category as a regular traveler, you will want to look into what is called per diem expenses.
Posted by Alamo Bookkeeping Associates