Hello, I've got three questions regarding meal deductions for a self employed business owner. I honestly have no idea what the right thing is so I'm hoping one of you pros can guide me in the right direction. See my questions below. Here's the basic rundown on my company.Entity type: Sole Proprietorship with S Corp ElectionType of Business: Service based business (do work at customer's home)Employees: 2 (my wife and myself) Question 1When we arrive on our job site, we unload our equipment from our truck and are unable to leave the job site during the day until the job is completed.If we purchase drinks (company pays for drinks. Less than $10/day) at a gas station while on our way to the job site so that we can have them available for consumption during the job since we are unable to leave, would this be a deductible business expense?Not sure if this is considered "for the convenience of the employer" and would be deductible or not? It seems like a gray area to me. Question 2Sometimes, if we finish up late in the day let's say 7-8 p.m. We'll stop and grab dinner since we are getting home to late to cook at the house. If the company buys dinner ($15/per person) since we worked past 5 pm. Would this be a deductible business expense?I'm not sure if we can even claim meals, but I wanted to ask because we do run into this situation every now and then and I didn't know if the company could claim this expense since we were working past normal business hours for the benefit of the company (even though we own the company). Question 3If these expenses are deductible, is it a 50% or 100% deduction? Thank you in advance for your help. I truly appreciate it!

Question

Meal Deductions for Self Employed

Forum|Forum|5 years ago
February 10, 2021
1 reply
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Hello,

I've got three questions regarding meal deductions for a self employed business owner. I honestly have no idea what the right thing is so I'm hoping one of you pros can guide me in the right direction. See my questions below.

Here's the basic rundown on my company.

Entity type: Sole Proprietorship with S Corp Election
Type of Business: Service based business (do work at customer's home)
Employees: 2 (my wife and myself)

Question 1

When we arrive on our job site, we unload our equipment from our truck and are unable to leave the job site during the day until the job is completed.
If we purchase drinks (company pays for drinks. Less than $10/day) at a gas station while on our way to the job site so that we can have them available for consumption during the job since we are unable to leave, would this be a deductible business expense?
Not sure if this is considered "for the convenience of the employer" and would be deductible or not?
It seems like a gray area to me.

Question 2

Sometimes, if we finish up late in the day let's say 7-8 p.m. We'll stop and grab dinner since we are getting home to late to cook at the house.
If the company buys dinner ($15/per person) since we worked past 5 pm. Would this be a deductible business expense?
I'm not sure if we can even claim meals, but I wanted to ask because we do run into this situation every now and then and I didn't know if the company could claim this expense since we were working past normal business hours for the benefit of the company (even though we own the company).

Question 3

If these expenses are deductible, is it a 50% or 100% deduction?

Thank you in advance for your help. I truly appreciate it!

TurboTax Self Employed Online

ColeenD3

1) Yes, it is deductible. You are providing meals for employees. (But are you employees? Do you issue Forms W-2 to yourselves?)

Businesses can fully deduct the cost of:

Office parties and outings held for the benefit of its employees (other than highly-compensated employees)
Meals and entertainment provided to employees as compensation and reported as taxable wages
Meals and entertainment expenses reimbursed to employees upon submission of employee expense reports

Things like free coffee, donuts, and snacks provided at the workplace, as well as onsite meals for employees working overtime, are considered “meals provided for the convenience of the employer.” In 2017 and prior tax years, these were 100% deductible. Under the Tax Cuts and Jobs Act (TCJA) that Congress signed into law on December 22, 2017, these are now 50% deductible in tax years 2018 through 2025, and nondeductible after that.

2) No. You are no longer working. The fact that is saves you labor at home does not make it business meals.