Business Meals and Entertainment Deduction Rules (2025)

Current rules (2025):

Business meals: 50% deductible. Requirements:

• The meal must have a clear business purpose (discussing business, meeting with a client, traveling for business)
• The taxpayer or an employee must be present at the meal
• The meal cannot be “lavish or extravagant” (reasonable by normal standards)
• The meal must NOT be entertainment-related (a meal at a sporting event in a luxury suite is entertainment, not a meal)

Entertainment: 0% deductible. The TCJA eliminated the entertainment deduction entirely. Examples of non-deductible entertainment:

• Sporting event tickets
• Golf outings with clients
• Concert tickets
• Amusement park or theater tickets
• Country club dues
• Hunting, fishing, or vacation trips with clients

Exception: if food and beverages are purchased separately from entertainment and stated separately on the receipt or invoice, the food portion is 50% deductible even if consumed at an entertainment event. Example: attending a football game with a client. The tickets aren’t deductible. A separately purchased meal at a restaurant before or after the game is 50% deductible.

Employee meals: special rules.

• Office snacks and beverages for employees: 50% deductible (de minimis fringe benefit)
• Meals provided for the convenience of the employer (on-premises, business necessity): 50% deductible
• Holiday party or company picnic (for all employees): 100% deductible (de minimis fringe benefit)
• Meals during business travel: 50% deductible

Documentation required under IRC 274(d): Every meal deduction must be supported by:

1. Amount (receipt or credit card statement)
2. Date (when the meal occurred)
3. Place (name and location of the restaurant)
4. Business purpose (what business was discussed)
5. Business relationship (who attended, their relationship to you)

A credit card statement alone isn’t sufficient. You need the receipt PLUS a notation of the business purpose and attendees. Many business owners keep a meal log (physical notebook or digital app) alongside their receipts.