Wednesday, April 21, 2010
Food Write-offs
June --
I have been a freelance graphic designer for more than 2 years. I live in Boulder, Colorado.
I belong to several networking groups. I joined the groups to meet others in my field, help find potential clients, and to learn about running my business from other business people. Some groups have members in businesses related to mine (ie people who might refer clients to me or that I might subcontract work to). Some groups have members in a variety of businesses (ie potential clients).
Most of the groups do not require dues, but we meet at restaurants and each person pays for their own meal and drinks.
At the meetings, we may or may not discuss business beyond exchanging business cards and talking a bit about what each person does.
Is the cost of my meal deductible?
What about potluck networking events? Some of the groups meet at members' homes, and everyone is expected to bring a dish to share. Can I deduct the cost of the dish?
Does it make a difference if the majority of the time is spent on business related topics? I learn a lot and meet great people at these events, but I would be eating more cheaply if I stayed at home!
Betty
Dear Betty,
Good food questions.
First know that business meals and/or entertainment [M&E] are deductible if you discuss business before, during or after the meal or event. The amount of time spent on business does not matter as long as the purpose of the meal or event was business not personal.
However, you may deduct the cost of the meal or event only if you pay the cost for your business associate as well as for yourself. So it you attend a networking luncheon and pay for your lunch only, no M&E deduction. You may deduct the cost of getting to and from the luncheon if you came and went between another business activity.
A potluck? Well, if you are like most people who bring something to a potluck you bring more than enough for one person. So in that case I would deduct the cost of the potluck meal.
Here are more posts on expenses -- meals and entertainment .
-- June
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1 comment:
Dear June -
Here it is a year-something later and I've now joined a networking group. Would you comment on the tax deductability of a meal when buying a meal is required and not optional?
When the meeting host announces the agenda s/he always reminds us that we are meeting in the restaurant's meeting room so buying something off the menu is expected i.e., in lieu of paying a fee for the room).
What we order is discretionary, though we are given a guideline amount to spend.
Also, at every meeting every person introduces their business, elevator pitch, and tells the group the type(s) of referrals they are looking for that week. In fact, the meeting is like a weekly workshop and not at all a social event.
So are the M&E rules you cited for Betty changed for the following:
- Buying a meal is required/expected.
- Billing the meeting as something other than a networking meeting (i.e., workshop, presentation, ...)
- Other legitimate angle?
Thank you,
Rose
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