"You can deduct a portion of your business meal and entertainment expenses as long as they meet the requirements of being directly related to or associated with business. Entertainment and meal expenses you incur for a client, customer or employee are permitted deductions as long as the event is directly related to your business or associated with business activities. If you take a client to lunch to finalize a project planning phase, for example, you are conducting business during the meal. This qualifies as being directly related to your business and can be deducted on your income taxes. Meals and entertainment that are related to and happen immediately before or after a business event such as a meeting qualify as an associated expense and can be deducted.
Record Keeping
You must keep detailed records of meal and entertainment deductions. Your records must note how the expense is business-related, how much money you spent, the date and location of the meal or entertainment, and the relationship of the people you entertained. When you get your restaurant receipt, make a habit of jotting down the business purpose of the meal and all attendees before filing it in your records. If you need to recall that deduction later, you won't have to rely on memory alone, and you will automatically meet the recordkeeping requirements for the deduction.
50 Percent Deduction
Generally only 50 percent of the meal or entertainment cost can be deducted. You cannot claim meal and entertainment deductions as travel expenses. You also cannot claim the deduction for meals and entertainment that are lavish or extravagant."
