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Meals and Entertainment Deduction
Maximize tax deductions with business meals and entertainment
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Are Business Meals Deductible In 2023 For The Self-Employed?

Picture this: you're a freelance consultant, and one of your clients prefers to have meetings over lattes. You’ve spent countless hours (and dollars) discussing their future business strategy, and now you’re wondering if any of that could be a deductible business expense from your taxes. You’re in luck. The meals and entertainment deduction in 2023 allows self-employed individuals to deduct 50% of business meals as a write-off. This rule comes as an update to the 2022 meals and entertainment deduction, which allowed 100% of business meals to be tax-deductible. Entertainment expenses are a whole different story. After the Tax Cuts and Jobs Act, these costs are no longer considered business expenses. You can still deduct some entertainment expenses, but the rules can get tricky. So consulting with a CPA first is a good idea.

Table of contents

Key takeaways...Read more

Can I deduct meals as an independent contractor?...Read more

When are meals 100% deductible in 2023?...Read more

Can lunch be a business expense?...Read more

Should I keep grocery receipts for taxes?...Read more

Can I write off alcohol as a business expense?...Read more

Can I write off meals while traveling for work? ...Read more

Are office snacks tax-deductible in 2023?...Read more

Is entertainment deductible in 2023? ...Read more

Can you write off country club dues?...Read more

Can you write off a golf membership?...Read more

Are holiday parties tax-deductible?...Read more

Writing off IRS business deductions in 2023...Read more

Key takeaways

  • The business meals deduction in 2023 allows 1099 workers to write off half of their meal costs.
  • Most entertainment expenses are no longer tax-deductible.
  • Report the 2023 business meals deduction on Schedule C, Line 24b.

Can I deduct meals as an independent contractor?

The IRS has specific rules for deducting business meals for independent contractors looking to take advantage of their business lunches. For one, deductible meals have to be shared with an associate. A solo meal doesn’t count, even if you’re the only employee of your business. You can use IRS Publication 535 as a guide when deducting business expenses. The second condition to claim the meals deduction in 2023 is that you have to discuss business matters during the meal. While this may seem obvious, you can’t deduct a meal just because you ran into your client at a bar and decided to catch up. The meal should have a clearly stated business purpose, whether you’re meeting up with new clients or chatting about current projects with existing ones. The business meals deduction in 2023 isn’t limited to just clients, though. If you have a business meeting with any kind of business associate over a meal, you can write off half the cost. Business associates include:
  • Employees
  • Customers
  • Partners
  • Suppliers
  • Agents
  • Advisors
So, if you're a freelance model and meet with your agent to discuss your upcoming gigs over a coffee or grab dinner with your lawyer to go over a new job contract, both instances count as a deductible expense. To write off a meal, the cost must be considered an ordinary and necessary expense to your business. So, if going out for meetings with your clients or associates doesn’t make sense for your line of work, the IRS isn’t going to be too happy seeing it as a tax deduction. You can also deduct business meals you have with your spouse if they’re related to your business in some way and your cause for the meal is work-related. If you and your partner have a company together, the cost of your business meetings over food is a legitimate tax deduction. A 1099 tax calculator can help you figure out which meals you can write off. Super fancy meals don’t really count as an ordinary expense, so they can’t be written off either. So you can forget about taking a client out for steak just to get a tax deduction– unless you have a valid reason. If the cost isn’t reasonable, you can safely assume that the business meal isn’t going to count.
Infographic entitled Types of Business Insurance listing insurance expenses that can be written off from 1099 taxes.

When are meals 100% deductible in 2023?

There are certain situations when deductible meals can be fully written off. For example, if you buy your employees dinner to thank them for working late, those costs are 100% tax-deductible. Remember that the employees have to be physically present at the meal for the deduction to be legitimate. Meal costs are also a deductible business expense from 1099 tax in the following situations:
  • Company-sponsored charity event
  • Team-building activities
  • Holiday parties
  • Meetings
  • Training workshops and seminars
If you’re a self-employed individual new to claiming the meals and entertainment deduction in 2023, FlyFin can help. A.I. scans expenses to find tax deductions, and CPAs review them and prepare and file your taxes. FlyFin can also help you track your income and calculate estimated taxes.

Can lunch be a business expense?

Imagine you're a freelance graphic designer and have a meeting with a potential client to discuss a new project over lunch at a local restaurant. During the meal, you showcase your portfolio, discuss project details and outline your proposed design solutions. The lunch serves a clear business purpose— a crucial part of your client acquisition process. In this scenario, the cost of the lunch can be considered a deductible meal. You can write half of it off your taxable income because it directly relates to your business. Business meal deductions can lower 1099 income and help you pay less self-employment taxes.

Should I keep grocery receipts for taxes?

Suppose you operate a small catering business from your home. You regularly purchase groceries and food items to prepare meals for events and clients. In this case, those grocery receipts are essential. They show the cost of ingredients directly tied to your business operations. You can use these receipts to claim those business meals as deductions on your business tax return, reducing your taxable income and, ultimately, your tax liability.

Can I write off alcohol as a business expense?

This is a tricky one. Alcohol is considered to be a deductible business expense for your taxes, but it only works if the cost of the drinks purchased aren’t too extravagant. Writing off a couple of cocktails from a client dinner as a business expense deduction makes sense, but you can’t use the same reasoning if you’re trying to write off a bar tab during happy hour. Deductible meals can include alcohol, but the IRS doesn’t make it easy. There are no clear rules on price limits, so you’ll have to take your chances. But if the costs seem reasonable, you should definitely take advantage.
Infographic entitled Types of Business Insurance listing insurance expenses that can be written off from 1099 taxes.

Can I write off meals while traveling for work?

When it comes to work-related travel in 2023, deducting meals while on a business trip can provide a significant tax advantage. Meals considered necessary and directly related to your business activities while away from your tax home are 50% tax-deductible. This includes meals with clients, colleagues, or any business meetings during your trip. The IRS often uses a "per diem" method for meal deductions during travel. Instead of itemizing every meal receipt, you can deduct meals at a standard daily rate determined by the IRS. This per diem rate accounts for both meals and incidental expenses, and it varies depending on your travel location. For 2023, the IRS has updated per diem rates to $74 for locations outside the contiguous US states (CONUS) and $69 for meals inside CONUS. By using per diem rates, you can deduct meal expenses without needing detailed receipts, making it a convenient option for frequent travelers. You can also deduct other travel-related costs like laundry, vehicle mileage, travel and hotel costs.

Are office snacks tax-deductible in 2023?

Office snacks are 50% tax-deductible in 2023, just like most other business meal expenses. You can also deduct half the costs of buying lunch for your employees. To claim these deductions, saving the receipts is essential. Proper records will prove to the IRS that these expenses were, in fact, business-related.

Is entertainment deductible in 2023?

The entertainment deduction in 2022 remains unchanged in 2023. After the Tax Cuts and Jobs Act, most client entertainment expenses are not tax-deductible. You may still be able to claim the meals and entertainment deduction in 2023 if you can separate the two costs. Let’s say you’re holding an office function at a hotel. You could deduct the cost of catering for that event but cannot deduct the cost of renting a conference room. Entertainment costs can count as business expense deductions only in certain situations. If you’re a writer who reviews cultural attractions in your city, you can write off the cost of the museum and show tickets as it's a reasonable business expense. If you sell any form of entertainment to your clients, those costs are deductible, too. Bars with live music can deduct the cost of hiring musicians to play in their band.

Can you write off country club dues?

Even if you meet your client frequently at the country club, the cost of the membership fees cannot be deductible. Regardless of whether you discuss business at the country club, the membership falls under the IRS category of “entertainment,” so it is exempt from the deduction.

Can you write off a golf membership?

Similarly, golf memberships cannot be claimed as a tax deduction. Unlike the business meals deduction in 2023, any kind of membership to entertainment or recreation facilities is no longer considered an itemized business expense.

Are holiday parties tax-deductible?

If you throw your employees a holiday party, the costs can be 100% tax-deductible if you follow some rules. The guest list has to include non-highly compensated employees, the party has to be held in your office, and you have to hold on to all your party records. That includes guest lists, invitations, receipts and a list of expenses.
Infographic entitled Types of Business Insurance listing insurance expenses that can be written off from 1099 taxes.

Writing off IRS business deductions in 2023

If you’re looking to write off any business expenses deductions, you need to keep the correct records. For claiming business meal deductions in 2023, you’ll need to keep your receipts. Make sure your receipt shows:
  • Location of the meal
  • Who you dined with
  • Purpose of meal
  • Cost of meal (including tip)
  • Date of meal
The IRS requires self-employed individuals to hold on to receipts over $75. But even if your meal costs less than $75, you should still hang on to your receipts in case of an audit. Line 24b on Schedule C is where you should report your meals deduction in 2023. IRS Publication 535 has a lot more business deductions that self-employed individuals can write off. As these deductions lower taxable income, it helps when paying estimated taxes, too. An estimated tax calculator can help you figure out whether your tax liability is over $1,000 and how much each quarterly payment needs to be.
Infographic entitled Types of Business Insurance listing insurance expenses that can be written off from 1099 taxes.
Knowing what qualifies as a business meal expense can be tricky, as tax rules are always changing. Apart from reaching out to a tax pro, you should also keep organized records to have all the necessary tax information to easily claim your deductions.

Office Supplies Tax Deduction

Office supplies are tax deductible for self-employed individuals and can be reported under the office expenses category on Schedule C.

Phone Tax Deduction

Cell phones can be a business tax deduction for self-employed individuals if it is an ordinary and necessary expense. A separate business cell phone can be fully written off.

Advertising Tax Deduction

Ordinary and necessary promotion expenses and marketing expenses are tax-deductible for self-employed individuals. They should be claimed on Schedule C when filing 1099 tax.

Business Insurance Tax Deduction

Self-employed individuals can deduct business insurance expenses from their 1099 taxes. Sole proprietors and single-member LLCs can claim it on Schedule C.

Business Travel Tax Deduction

Expenses related to traveling are deductible for business purposes. A per diem rate is set for deductible travel expenses.

Charitable Contribution Tax Deduction

If you make a charitable donation to an organization, it might count as a tax deduction. Not all charitable donations count as a write-off.

Clothing And Accessories Tax Deduction

Self-employed individuals can take the clothing tax deduction if their clothes cannot be worn outside the work environment.

Commission And Fees Tax Deduction

Self-employed individuals can claim certain commissions and fees as tax deductions if they are related to their business and are ordinary and necessary.

Contract Labor Tax Deduction

If you do any contract labor, you will have to pay contract labor taxes, also known as SE tax. Estimated payments quarterly need to be made for tax liabilities over $1,000.

Internet and WiFi Tax Deduction

Self-employed individuals can deduct some of their internet bills if they work from home as part of the home office deduction. Internet costs can also be reported on Schedule C.

Medical and Dental Tax Deduction

Certain dental and medical costs can be claimed as a medical tax deduction if itemized when paying income taxes. Expenses have to be more than 7.5% of AGI.

Rent Tax Deduction

Rent is tax deductible for self-employed individuals who work from home or have a separate office space. Some states offer renters tax credits to lower state taxes.

Repair and Maintenance Tax Deduction

Capital improvements can be claimed as a tax deduction through depreciation. Repairs to rental properties can be claimed as a business expense.

Professional and Legal Services Tax Deduction

Legal fees are tax deductible from 1099 taxes under the legal and professional fees category on Schedule C. The category also includes consultant and tax prep fees.

Shipping Tax Deduction

Business-related shipping expenses are tax-deductible. Shipping supplies and the cost of shipping are included as write-offs.

Software Tax Deduction

Software depreciation can be claimed with the straight-line method, Section 179 or through amortization. Report software depreciation on Form 4562.

Student Loan Payment Tax Deduction

Student loan interest paid is tax-deductible, and every type of education loan qualifies for the deduction.

Taxes and Licenses Tax Deduction

Self-employed individuals can take the license fee tax deduction on taxes and licenses that are ordinary and necessary business expenses.

Training and Education Tax Deduction

The educator expenses tax deduction allows eligible educators to deduct $300 of unreimbursed expenses from their taxes. Use education tax credits to lower tax liability.

Utilities Tax Deduction

Utilities are tax deductible when they are an ordinary and necessary business expense. They can be claimed with the home office deduction or as a rental property deduction.

Vehicle Insurance Tax Deduction

Interest on a car loan is tax deductible if it is used for business. Choose between the standard and actual method when claiming the vehicle deduction.

Vehicle Purchase Tax Deduction

You can claim the vehicle tax write-off if you’re self-employed and use your vehicle for business. It can also be taken if you lease your vehicle.

Mortgage Interest Tax Deduction

The mortgage interest deduction can be claimed by homeowners who itemize their expenses. You could claim the mortgage interest tax credit if you’re in a lower tax bracket.

Office Supplies Tax Deduction

Office supplies are tax deductible for self-employed individuals and can be reported under the office expenses category on Schedule C.

Phone Tax Deduction

Cell phones can be a business tax deduction for self-employed individuals if it is an ordinary and necessary expense. A separate business cell phone can be fully written off.

Advertising Tax Deduction

Ordinary and necessary promotion expenses and marketing expenses are tax-deductible for self-employed individuals. They should be claimed on Schedule C when filing 1099 tax.

Business Insurance Tax Deduction

Self-employed individuals can deduct business insurance expenses from their 1099 taxes. Sole proprietors and single-member LLCs can claim it on Schedule C.

What’s FlyFin?

FlyFin caters to the tax needs of freelancers, gig workers, independent contractors and sole proprietors. But anyone can file taxes through FlyFin! FlyFin tracks all your business expenses automatically using A.I. technology. Then, our CPA team files a guaranteed 100% accurate tax return for you – to save you a couple thousand dollars and a ton of time on your taxes. In addition, you can download the FlyFin app and have your taxes filed in less than fifteen minutes, saving time and money.
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