Meals & Entertainment Deductions

Business meals are a common expense, but what’s actually tax deductible can be a little tricky. Over the years, the rules around meals and entertainment have changed through different tax laws, so it’s always good to double-check what applies today.

Right now, most business meals are 50% deductible as long as they’re directly related to your business. To qualify, the meal should involve a client, vendor, or colleague, include some sort of business discussion, and not be considered lavish or excessive. Starting in tax year 2026, employer-provided meals lose their deduction entirely, and this article lays out where the other meal categories stand. Every category below still has to be ordinary, necessary, and not lavish or extravagant to qualify.

Entertainment costs, however, aren’t deductible. That includes things like concerts, sporting events, or shows—even if business is talked about.

The 50% deduction remains the standard for client meals and travel meals. Employer-provided meals are the exception starting in 2026 (see below).

Rules for business meals and entertainment:

What makes a meal deductible?

A business meal has to clear three conditions to qualify for the deduction:

• The meal expense must be ordinary and necessary in carrying on your trade or business
• You, as the business owner, or your employee must be present during the business meal with at least one other party present (ex. client or colleague). The meal also can't be part of an entertainment activity. This rule would not apply to meals while you or your employees are traveling for business or conferences.
• The meal expense cannot be lavish or extravagant under the circumstances

You must keep a proper record of the business meal:

• The amount of expense (delivery fees, tips, and sales tax can be included)
• The time and place of the expense,
• The business purpose of the expense, and
• The business relationship to the taxpayer of the individuals being entertained

Good recordkeeping protects the deduction, and it takes seconds: jot the details on the receipt or snap a photo and save it to your Collective Documents, or any other document storage system you use.

What meals are never deductible?

• Meals, groceries, or snacks for your own consumption: As an S Corp owner, you are considered an employee of your company, BUT if you are the only employee, you cannot have a business meeting with yourself. 
  If you are alone, then it isn't a business meal expense. Ordering UberEats for yourself while working through lunch at home/office, going to McDonald's to grab a quick bite, or ordering a latte at a coffee shop while working on your laptop doesn't count as a business meeting and is not a deductible meal expense. These meals are considered personal and should NOT be paid through your business accounts (debit card, credit card, etc.).
• Meal expenses incurred for spouses, dependents, or other individuals accompanying the taxpayer: If your spouse joins a business dinner with a client, their meal isn't a deductible expense, even though yours is. Pay for the business meal from your business account and cover your spouse's portion from your personal account.
• Entertainment: Renting a suite at a game or seeing a concert to woo a client are not deductible business expenses. 
• Starting in 2026: meals provided by the employer for the convenience of the employer. These were 50% deductible in 2025 and earlier years; from 2026 forward, they're treated as a de minimis fringe benefit and are not deductible.

Meals on Your Profit & Loss Statement

If any meals are outside the normal 50% deductibility guidelines, like using your business card to purchase groceries for yourself (0% deductible), be sure to let us know, and indicate why. Our general assumption is that all meal transactions in business accounts are 50% tax deductible, so if something is either 100% or 0% deductible, we will need your help to identify those transactions.

Frequently asked questions

Are business meals with clients still 50% deductible in 2026? Yes. Meals with clients, vendors, or contractors, and meals during business travel, stay 50% deductible with substantiation, unchanged from 2025.

What changed for meals in 2026? Meals an employer provides for its own convenience are now a de minimis fringe benefit and are not deductible at all. That's the only category that changes; everything else on this page carries over from 2025.

Which meals are 100% deductible? Meals included in an employee's taxable compensation, meals a client reimburses you for, meals offered free to the general public for marketing, meals sold to customers, meals with more than 50% of staff present, and company holiday party food are all 100% deductible with substantiation.

Is a meal at a sporting event or concert with a client deductible? The entertainment itself is never deductible. If the food is billed as a separate charge from the game or concert ticket, that food can potentially qualify as a 50% deductible business meal; if it's bundled into the ticket price, none of it is deductible.
 

Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as legal, financial, or tax advice. It is not intended to be a substitute for obtaining legal, accounting, or other financial advice from an appropriate and/or licensed  adviser, or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.