The business meal deduction is one of the most common write-offs for freelancers, consultants, and small business owners. It's also one of the most audited.
Not because people are cheating — most aren't — but because the documentation requirements are specific and most people don't know exactly what they need to keep.
Here's what the IRS actually looks at, and how to make sure your meal receipts hold up.
The five things every business meal receipt needs
The IRS is specific. Under IRC Section 274, a business meal deduction requires documentation of five things:
1. The amount. The total cost of the meal including tax and tip. Your credit card statement shows this but doesn't satisfy all five requirements on its own.
2. The date. When the meal took place. This is on the receipt.
3. The place. Name and location of the restaurant. Again, on the receipt.
4. The business purpose. What business was discussed. This is not on the receipt — you have to note it yourself. "Lunch" is not sufficient. "Discussed Q2 proposal with potential client" is.
5. The business relationship. Who you ate with. First and last name, their company, and their relationship to you. "Client" is not enough. "Sarah Chen, CEO of Apex Digital, prospective client" is.
The first three come from the receipt. The last two require a note — on the receipt itself, in your expense tracking app, or in a spreadsheet column.
Items 4 and 5 are where audits catch people. A stack of restaurant receipts with no notes about who was there and why doesn't satisfy the IRS requirements, even if every receipt is legible and intact. Add a quick note at the time of the meal — 10 seconds now versus a disallowed deduction later.
What counts as a legitimate business meal
Not every meal with another person is a business meal. The IRS requires that the meal has a clear business purpose — discussing a contract, meeting with a client, working through a project with a vendor.
Meals that generally qualify:
- Client meetings where business was discussed
- Meals with current or prospective business partners
- Working lunches with employees (with limitations)
- Meals during business travel (though these are treated slightly differently)
Meals that generally don't qualify:
- Meals with friends who happen to also be in your industry
- Solo lunches, even if you were thinking about work
- Family meals even if family members work for your business (strict scrutiny applies)
- Lavish or extravagant meals (the IRS can disallow the portion deemed excessive)
The test is: would this meal have happened if there were no business relationship? If the honest answer is yes, it's probably not deductible.
How to document meals properly
The best habit is to note the business purpose and attendees immediately after the meal — while you still remember who was there and what was discussed. Write it on the back of the receipt, add a note in your phone, or log it directly in your expense tracker.
What to capture:
Date: March 14, 2026
Restaurant: Trattoria Roma, Chicago
Amount: $127.40 (50% deductible = $63.70)
Attendees: James Park, Founder at Northlight Labs (prospective client)
Purpose: Discussed retainer proposal for Q2 brand identity project
That's exactly what you need. Date and place come from the receipt. Amount comes from the receipt. The last two lines come from you.
Receipt Converter extracts the first three automatically — vendor, date, and total. You add the business purpose and attendee note. Total time per meal receipt: under a minute.
Drop any receipt photo below. Results in a few seconds, free.
The 50% rule in practice
Business meals are 50% deductible. That means a $200 client dinner gives you a $100 deduction, which at a 25% tax rate saves you $25. Not life-changing for one meal, but across 12 months of regular client meetings, it adds up.
The 50% limit applies to food and beverages. It does not apply to:
- Meals provided to employees as part of their compensation (treated differently)
- Meals at company events open to all employees (may be 100% deductible)
- Meals that are part of a package deal where the meal cost isn't separately stated
Entertainment is different from meals
An important distinction: entertainment expenses (sporting events, concerts, golf) are no longer deductible under current tax law (post-2017 Tax Cuts and Jobs Act). Meals eaten at an entertainment event can still be deductible if the food and beverage cost is separately itemized on the receipt.
If you take a client to a game and buy them dinner at the stadium, the dinner is potentially deductible. The tickets are not. Make sure the receipt separates food from event costs.
Tax rules around meals and entertainment are updated periodically and can vary by business structure. The guidance above reflects current federal rules, but your state may have different treatment, and specific situations may have nuances. Log everything with good notes and let your accountant make the final call on what's deductible.
If you want a system for tracking all your business expenses — not just meals — read our guide on how to organize receipts for taxes. The same principles apply, with the meal-specific documentation layered on top.
Start documenting your receipts the right way. Try Receipt Converter free →