Handbook / Business deductions

Business meals deduction for the 2026 tax year: the 50% rule and records

Tax-year note: Tax information on this page applies to the 2026 tax year (returns filed in 2027), from IRS pages checked in November 2026. Figures and dates are labelled with their tax year where they appear. Check current IRS pages before you rely on them.

Meals with clients, prospects and collaborators are a normal part of running a business. They can be partly deductible, but the rules are stricter than many people think, and records matter more than for most expenses. This guide covers the business meals deduction for the 2026 tax year.

Publication 463, the IRS guide to travel, gift and car expenses, was the 2025 edition when this page was checked. The rules below reflect it and the current IRS Tax Topic 511; check for a 2026 edition before filing.

When a meal is deductible

A business meal can be deductible if:

• it is an ordinary and necessary expense of carrying on your business
• it is not lavish or extravagant under the circumstances
• you, or an employee, are present
• the food or drink is provided to you and a business contact, such as a current or potential customer, client, consultant or similar business associate

Publication 463 explains that a meal is not lavish merely because it costs more than a fixed amount or takes place at a deluxe restaurant; the test is whether it is reasonable based on the facts and circumstances.

The 50% limit

IRS Tax Topic 511 states that the deduction for business meals is generally limited to 50% of the unreimbursed cost. The limit applies to the meal itself, including tax and tip. Publication 463 lists exceptions, including:

• reimbursed meals: if you are self-employed and a client reimburses you or gives an allowance for meals, and you provide adequate records to the client, you are not subject to the 50% limit; the client is
• meals treated as compensation to employees
• recreational events for employees generally, such as a holiday party
• meals provided to the public as advertising
• meals sold to customers

Most solo business owners simply apply the 50% limit.

Meals while traveling

When you travel away from your tax home overnight for business, your own meals are generally deductible, subject to the 50% limit. Topic 511 notes that instead of keeping records of actual meal costs, you can generally use a standard meal allowance that varies by location. The guide to travel expenses covers travel rules.

Entertainment

Entertainment, such as sporting events, concerts, golf or theatre, is generally not deductible, even if business is discussed. If food and drink are bought separately from entertainment, or the cost is stated separately on a bill, the meal portion may qualify as a business meal.

What is not deductible

• personal meals on normal workdays
• meals with friends or family where business is incidental
• lavish or extravagant meals
• your share of a meal where no business purpose exists

Records

The IRS asks for supporting documents that identify the payee, amount, proof of payment, date and a description showing the business purpose. For meals, record:

• amount and date
• place
• business purpose: the topic or expected benefit
• business relationship of the people present

Write these on the receipt or in your bookkeeping app straight away. The guide to receipt tracking shows a simple routine.

Bookkeeping

Keep meals in their own account, separate from entertainment and travel, so the 50% calculation is easy at year end. Many accounting tools track the deductible portion automatically. On Schedule C, deductible meals have their own line.

Examples

• Lunch with a prospective client to discuss a proposal: generally 50% deductible with records.
• Coffee alone while working in a cafe near home: personal.
• Dinner on an overnight business trip: generally 50% deductible.
• Meals billed to and reimbursed by a client with itemised receipts: generally deductible by the client rather than you, with the 50% limit applying to them.
• Tickets to a game with a client: entertainment, generally not deductible.

Gifts are different

Gifts to clients follow separate rules and limits. See business gifts.

Keeping meal records simple

Write the business purpose and the names of the people you met on the receipt or in your bookkeeping app on the same day. Separating meals from other expenses in your accounts makes the 50% limit easy to apply at year end.

For the 2026 tax year, business meals are generally 50% deductible when they are ordinary, necessary and not lavish, with a business contact present or while traveling. Entertainment generally is not. Record amount, date, place, purpose and attendees every time.