What types of meal and entertainment expenses are 100% deductible on a business return?
If meals or entertainment are provided for the benefit of your employees, you can write off 100% of the cost as a business expense. This is an exception to the usual 50% write-off rule for meals and entertainment.
Common examples of expenses that can be written off at 100% include:
- Meal and entertainment expenses for a company picnic or holiday party.
- Free coffee, bottled water, donuts, etc. provided to employees at the place of business.
- Free food or beverages provided to the public for promotional purposes.
- Meals provided at the place of business to more than half of the employees as an enticement for working after-hours, weekends, or holidays.
- Cost of meals included on employee W-2 forms as taxable compensation.