Updated November 7, 2026. Quick answer: A business meal is 50% deductible when you (or an employee) are present and the cost is not lavish or extravagant. Keep the receipt and write four things on it or in your ledger: who you met, where, the date and the business reason. The $75 figure belongs to travel meals: for those, documentary evidence is required for any expenditure of $75 or more.
On deductions by profession: tax deductions for independent consultants and tax deductions for locum tenens physicians.
For what changed on the 2026 draft of the schedule, see Schedule C 2026 changes.
On records for a one-person business: client gifts and the $25 limit and rebuilding a lost receipt.
The two conditions and the 50% limit
This page reads the primary sources linked under Sources, as retrieved on November 6 and 7, 2026. Publication 463 is the 2025 edition.
Section 274(k) sets the conditions: no deduction is allowed for food or beverages unless “such expense is not lavish or extravagant under the circumstances” and “the taxpayer (or an employee of the taxpayer) is present at the furnishing of such food or beverages” Section 274(n) then caps what is left: “The amount allowable as a deduction under this chapter for any expense for food or beverages shall not exceed 50 percent of the amount of such expense which would (but for this paragraph) be allowable as a deduction under this chapter.” Publication 463 gives the working version: “You can continue to deduct 50% of the cost of business meals if you (or your employee) are present and the food or beverages aren’t considered lavish or extravagant.”
What to write down
The substantiation rule in section 274(d) now reaches traveling expenses, including meals and lodging while away from home, gifts and listed property. A local business lunch is therefore governed by the general rule in section 6001 and its regulation, which requires records “sufficient to establish the amount of gross income, deductions, credits, or other matters required to be shown by such person in any return of such tax or information”, and by the two conditions above, which turn on facts you must be able to show: that you were there, that it was not lavish, and what the business reason was. This page’s reading is that the safest ledger entry is the one the older entertainment regulation used to demand, and it costs ten seconds:
| Element | What to record | Where it comes from |
|---|---|---|
| Amount | The total on the receipt, including tax and tip | The receipt |
| Date and place | The date, and the restaurant or location | The receipt |
| Who | The name and business of each person, so the business relationship is clear | Your note on the receipt or in the ledger |
| Why | The business reason, in one line | Your note, written at or near the time |
Travel meals are the stricter case
When the meal is part of a trip away from home, the regulation says: “no deduction is allowed for the expense of any food or beverages paid or incurred while traveling away from home in pursuit of a trade or business unless the taxpayer meets the substantiation requirements in section 274(d).” For those meals the elements the regulation lists are the amount, the dates of the trip, the destination and the business purpose. The $75 receipt rule lives here: Publication 463 says documentary evidence is not needed when “Your expense, other than lodging, is less than $75.” That exception is about the receipt, not the record. You still write down the elements. For the full receipt rule, see IRS receipt rules for business expenses.
The per diem alternative, and when meals stay at 50%
If you travel, you can use the standard meal allowance instead of actual cost, and Publication 463 says the 50% limit still follows: “regardless of the method you use, you can generally deduct only 50% of the unreimbursed cost of your meals.” Details on that route are on per diem for the self-employed. Where the client reimburses meals you account for separately, see reimbursed client expenses. Entries for deductible meals land on Schedule C line 24b.
What does not become a business meal
Meals with no business purpose, meals where neither you nor an employee was present, and lavish meals are outside the deduction altogether, not merely reduced. Entertainment is separate: Publication 463 says “You can no longer take a deduction for any expense related to activities generally considered entertainment, amusement, or recreation.” If food at an entertainment event is billed separately, it can still be a meal; ask for a separate line on the bill.
Software is optional here
The record above fits a spreadsheet and a photo of the receipt. SparkReceipt’s home page says you can snap a receipt at the counter in the phone app, and Dext’s US home page says you can send receipts by mobile, email, WhatsApp or desktop. Both are the vendors’ statements; this page has not used either. The note about who and why still has to be yours.
Common mistakes
- Keeping the card statement instead of the receipt. It shows payment, not what was bought or who was there.
- Writing “client lunch” with no name. The business reason is easier to defend with the person and the project.
- Deducting 100% because the meal was with a client. The ordinary business meal is limited to 50%.
- Treating the $75 figure as a rule for all meals. It is a documentary-evidence threshold for travel and similar items.
Related: IRS receipt rules for business expenses, Schedule C lines 24a and 24b, and Receipts and Expense Records for a One-Person Business.
Sources
- 26 U.S.C. 274, Disallowance of certain entertainment, etc., expenses (Cornell LII)
- IRS Publication 463 (2025), Travel, Gift, and Car Expenses
- Treas. Reg. 1.274-12, Limitations on deductions for certain food or beverage expenses (Cornell LII, eCFR text)
- Treas. Reg. 1.6001-1, Records (Cornell LII, eCFR text)
Read from the IRS documents linked above on November 7, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.