Meal expense question

9 Replies

My business partners and I typically meet out somewhere when discussing shop to take advantage of our business expenses. However, I was curious with Memorial Day weekend approaching am I able to hold our meeting at my house and simply write off 50% of the grocery bill for items we grill out versus eating out?

Hi Derek,

First, I am NOT a CPA or attorney so I would suggest you talk to one.

From my experience, you can claim the expense if you want however if you were to get audited it would be very difficult to justify to the IRS that this was a business expense and not just a holiday get-together. My advice if you choose to write it off is to have extremely detailed documentation including minutes/notes, even a recording if possible. Otherwise, be ready to pay the few dollars in taxes that you'll save by writing it off, if you get audited.

Best of luck.

Eric

@Eric Black

Definitely planned on meeting notes/minutes. Also thought as far as creating an RSVP invitation for our business meeting with a guest list sign in. I do like the idea of having an audio recording and perhaps pictures that shows projects/material being discussed.

Any other thoughts of what may be added in to help protect myself?

@Eric Black Thanks for allowing me to bounce some ideas off of you! I feel much more confident about setting this up now until we have an actual business location to conduct these.

Good discussion going on about the 'right' way to do this.

I do have a comment though.... I took Eric's comment about (maybe rightly or wrongly?) about the 'few dollars of tax savings' as meaning 'it is worth it to dedcut these things'. How I look at it is that I pay roughly a 40% tax rate overall; both halves of SSI, federal & state income tax, medicare, etc... If the cost of a meal was say $100, I would need to 'earn' about $160 pretax to pay for that. If you do that say 6 times a year, that is $360 out of pocket to me.

So I guess my personal thought is deduct everything you legitimately can, but just make darn sure you know the rules of how to do it.

Dan Dietz

Daniel Dietz, 3D Property Investments LLC | [email protected] | 608‑524‑4899

My suggestion is documentation documentation documentation. Emails to show your plan to have this meeting over at your house and an agenda of what you guys will cover. Generally meals and entertainment is 50% deductible but if it is something available to the general public it can be 100% deductible. (ie; allowing anyone in the public into your home to learn about your RE deals) Not sure that is safe to do of course in terms of letting strangers into your home...

Medium keystone cpa   logo professionalAmanda Han CPA, Keystone CPA, Inc. | 877‑975‑0975 | http://www.KeystoneCPA.com | Podcast Guest on Show #162

Just curious @Amanda Han if you go to a RE speakers dinner meeting and have wine with your meal, is the wine deductible?

Thank you so much @Amanda Han ! And all this time haven't taken this expense.