You might be wondering if, as a business owner or employee, you can deduct your lunch costs from your income. The brief response is that it depends on the situation. Here are some things you should know about deducting lunch from your business expenses.
Only if a meal satisfies certain requirements can it be written off as a business cost, according to the IRS. The meal must have been purchased while you were on business trip or conducting business, and it must have been directly related to your employment. In other words, if you need to eat lunch because you’re meeting with a client or going to a business conference, you might be able to write it off as a business cost. However, it is not tax deductible if you simply buy lunch for yourself during a typical workweek.
It’s also crucial to remember that the IRS has certain guidelines for how much you can deduct for meals. Typically, you are only permitted to write off 50% of the total expense of the meal. For instance, you can only write off $20 of a $40 lunch with a customer as a business expense.
Let’s now discuss job attire. A business expense are they? Once more, it depends on the situation. You might be eligible to deduct your work clothing from your taxes if they are seen as commonplace and required for your job. For instance, if you work in construction and need to purchase steel-toed boots or a hard hat, such expenses might be deducted. It’s not tax deductible, though, if you’re only getting a suit to wear to work.
Keep thorough records of all of your business spending, including invoices and receipts. You’ll need to show evidence that your costs were directly connected to your business if you ever face an IRS audit.
In conclusion, only select situations—such as when it’s directly tied to your business and incurred while traveling or conducting business—allow you to deduct lunch as a business expense. If your work clothing are considered common and necessary for your employment, they can also be deducted. Keep precise records, and if you have any questions or concerns, speak with a tax expert.