Empowering Healthy Business Podcast Episode 39: Tax Deductions for Meals, Travel & Entertainment

For small business owners, understanding small business tax deductions—especially for meals, entertainment, and travel—can significantly reduce tax bills. In a recent podcast, Calvin Wilder and Greg discussed how documentation plays a vital role. Always record who attended, what was discussed, and the business purpose behind each expense to ensure compliance and maximize your deductions.

Since 2018, the IRS has disallowed deductions for entertainment expenses such as sports tickets or golf outings. However, meals tied to entertainment events are still 50% deductible—as long as you itemize the meal separately from the entertainment cost. For example, if you treat a client to dinner at a baseball game, only the dinner qualifies for a deduction, not the game tickets.

Meals Deduction: Key Requirements

To deduct 50% of a meal expense, three conditions must be met:

• The meal must have a clear business purpose

• It must be reasonable, not lavish

• You or your employee must be present during the meal

A business lunch with a client qualifies as long as you document the meeting purpose and participants.

Business-related travel expenses like flights, hotels, rental cars, and meals are deductible if the trip is primarily for business. Keep in mind:

• Meals during travel are only 50% deductible

• Personal expenses are not deductible

• For mixed trips, itemize only the business-related costs

Key Takeaway

By understanding IRS rules and keeping detailed records, small business owners can make the most of available deductions and stay compliant. For a deeper dive, listen to the full podcast episode with Calvin and Greg.

• Meals, entertainment, and travel deductions can reduce tax liability

• Entertainment (e.g., sports events) is no longer deductible since 2018

• Meals tied to entertainment are 50% deductible if itemized

• Meal deductions require business purpose, reasonable cost, and your presence

• Travel expenses (flights, hotels, rental cars) are deductible for business trips

• Travel meals = 50% deductible; personal costs = non-deductible

• Mixed business/personal trips must be carefully itemized

• Detailed documentation ensures IRS compliance and maximized savings