Employee

Question

I have an office. Can I deduct bottled water and snacks for eating in the office?

Forum|Forum|6 years ago
June 1, 2019
11 replies
0 views

I am self-employed. This is NOT a home office. Others rarely come to the office, but I stock it with bottled water (there is no water to the building) and snacks. Are these a deductible business expense?

TurboTax Self Employed Online

Lisa995

Employee

whos eating and drinking the water and snacks if you rarely have anyone come by?

♪♫•*¨*•.¸¸♥Lisa♥ ¸¸.•*¨*•♫♪

S

SweetieJean

Employee

You have an office where there is no water? Is that even legal? (and please keep your related question in one thread).

Lisa995

Employee

@SweetieJean In my office building the only water is in the bathrooms, or the hose in the courtyard....not too uncommon around here.

♪♫•*¨*•.¸¸♥Lisa♥ ¸¸.•*¨*•♫♪

B

Bsch4477

Employee

What is the relationship between having the water and snacks and the production of income from your business?

E

ericalynneAuthor

Employee

Thank you. I am starting to figure this out. When a client or other work related person comes to my office for an appointment, I can deduct refreshments offered to this person. Otherwise, I would not.
However, if there is no water in the office, and it looks like a water utility bill is a legitimate deductible expense, then drinking water for the office should also be deductible, even if I am the only one there? Comments appreciated.

Correct.

Employee

Many people drink tap water.

O

Opus 17

Employee

I may not be understanding the distinction you are trying to make...

Since water is a basic utility, you can deduct your water service, used for cleaning and flushing the toilet, and you don't have to reduce it by an allowance for water that you drink, nor do you have to reduce your electric bill by the amount of electricity used by your coffee maker. But you can't deduct personal food and beverage expenses just because they are consumed at the office. The IRS is clear that (a percentage of) meals and similar expenses are deductible as "entertainment" when directly connected to making money, and you can deduct a percentage of meals when you travel out of town to make money, but your living expenses (food, commuting, etc) when working at your regular place of work are not deductible. Everyone has living expenses and the IRS is clear that only those expenses that are uniquely tied to earning a living may be deductible. Makeup is not deductible unless you are a clown or an actor, even though you may be expected to look presentable at work. Clothing is not deductible, even though you need to look professional at work, unless it is in the nature of a uniform that can't be worn for any other purpose. And so on.

There may be times where a large company provides snacks or free lunches on work property to the employees as a perk, and I don't honestly know if that is deductible or not. (If so, maybe on the grounds of maintaining employee productivity and morale.) But I don't see any way to make that work legitimately as a sole proprietor. There are too many rules and tax court rulings that go the other way. Any productivity gain that could be made by you eating at work would be the same if you brought your lunch from home and that makes it a non-deductible personal living expense.

S

SweetieJean

Employee

Excellent explanation.

O

Opus 17

Employee

Meals and entertainment that are directly related to your business are deductible. Generally this would mean meeting with clients, or snacks that you provide for customers. (My auto dealership service waiting room is stocked with pop and granola bars, for example). There has to be a direct relationship between the expense and your business income or expectation of future income.

However, food you eat yourself I would interpret as personal expense that is not deductible unless you are traveling away from home on business.

See IRS publication 463. The distinction is between "meals" (food you consume yourself) and "entertainment" (which can include food you provide to customers, including when you share a meal as part of landing a client, but not including personal food.)

S

SweetieJean

Employee

OP asked an earlier Q re per diem meals.

R

Read2YourKids

I re-read TAPS on this every year so that I'm sure I'm following IRS guidelines. I've found this particular guidance from a local accountant helpful:

Meals can only be deducted as a business expense if they are directly related or associated with the active conduct of a trade or business. There must be valid business purpose to the meal for it to be a deductible expense. Once this test is established, the expense falls into two categories: 50% deductible or 100% deductible. Meals with employees or business partners are only deductible if there is a direct or indirect business purpose

Meal expense that are 100% deductible:

Recreational expenses primarily for employees who are not highly compensated, such as the business holiday party or the company picnic
Office snacks provided to employees at the office
Meals provided on the employer’s premises to more than half of the employees for the convenience of the employer, meaning meals provided to employees to keep them working late or on weekends for the employer’s convenience
Meal expenses (or goods, services, and facilities) made available to the public, usually for advertising and promotional purposes
Meals for which the business is reimbursed for the expense
Meal expenses includible in income of persons who are not employees

Meal expense that are 50% deductible:

Meals directly related to business meetings of employees, stockholders, agents, and directors
Office meetings and partner meetings
Meals with clients, customers, and vendors that will benefit the business
Meals while on business travel status
Meals while attending a business seminar, convention, or any other form of meeting

Remember, you must have appropriate documentation (such as a receipt) to substantiate these expenses. The IRS will disallow expenses that do not have appropriate backup documentation. It's good business practice to create two separate meals accounts in your general ledger to keep track of the 2 different types of meal expenses.