What’s a Business Meal for Freelancers?

That’s easy or so too many people think.

  1. It’s when I go out with my friends and anyone mentions business, then I can take the cost of my meal as a business meal.
  2. When I go to work and I have to buy my lunch, that’s a business meal.

Unfortunately though many believe that either or both one or two is a business meal, neither one is.

So then what is one? Essentially there are two classes of business meals:

  1. The first type is when you’re in town, you’ve gone out for a meal with someone for a business purpose and you’ve picked up the tab for both of you. Clearly business has to be discussed. What kind of records do you need for this? You need notes on who you were with, what was the purpose of the discussion, when it took place, where it took place and how much it cost. Some people rely on noting the amount of the meal (or coffee) and relying on an agent giving them what is thought of as a $75 minimum needed for a receipt. I believe that agents have discretion about this and it’s better to have a receipt for every occasion. I also would mention the guest’s qualification for you to be taking them out so that the agent thinks it makes sense.
  2. The second type is the out of town travel meals. You are able to deduct the cost of your meals when you’re working away from home overnight on business. You can either keep track of the amount of money spent or rely on per diems for meals (not for hotels or fares). Domestic per diems can be found at http://www.gsa.gov/portal/content/110007 and foreign per diems at https://aoprals.state.gov/web920/per_diem.asp.

Whether or not the meal is in town or out of town all business meals are deducted at 50% of the cost.