Is lunch with a client line 24b or not deductible?

A meal where no business was conducted and no client or prospect was present is personal, however it was paid for.

Is lunch with a client line 24b or line 8?

A meal is line 24b at 50 percent; food given away to the public as promotion, free samples at a market stall for instance, is advertising on line 8 and is not halved.

Where does a client lunch go on Schedule C? Line 24b

Q: Where does a client lunch go on Schedule C?

Lunch with a client belongs on Line 24b, deductible meals. A meal with a client or a prospect where business is discussed is a deductible business meal on line 24b, and under current law you deduct 50 percent of what you paid. The 50 percent applies to the whole bill including tax and tip, so a $96 lunch is a $48 deduction. Three conditions have to hold: the expense is ordinary and necessary for your trade, you or an employee is present, and the meal is not lavish or extravagant in the circumstances.

Short answer Schedule C, Line 24b Deductible meals

Lunch with a client belongs on Line 24b, deductible meals.

Why line 24b

A meal with a client or a prospect where business is discussed is a deductible business meal on line 24b, and under current law you deduct 50 percent of what you paid. The 50 percent applies to the whole bill including tax and tip, so a $96 lunch is a $48 deduction. Three conditions have to hold: the expense is ordinary and necessary for your trade, you or an employee is present, and the meal is not lavish or extravagant in the circumstances.

Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so lunch with a client lands on Line 24b without you sorting it.

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What lunch with a client is confused with

not deductible, not deductible: A meal where no business was conducted and no client or prospect was present is personal, however it was paid for.
Line 8, advertising: A meal is line 24b at 50 percent; food given away to the public as promotion, free samples at a market stall for instance, is advertising on line 8 and is not halved.
Line 24a, travel: A meal eaten while away from home overnight is still line 24b at 50 percent, even though the flight and the hotel for that same trip are line 24a at full cost.

Examples that belong on line 24b

A $96 lunch with a prospect, deducted at $48
A $140 dinner with two clients to agree next year's scope, deducted at $70
A $38 breakfast with a referral partner, deducted at $19
A $64 lunch with a supplier to negotiate terms, deducted at $32
A $22 tip on a client dinner, included in the amount then halved

What does not belong here

The full cost of the meal rather than half of it.
A meal with a friend who might one day refer work.
Drinks after the client left.
A meal paid for a client who was not there with you.

The limit that applies

Limited to 50 percent of the cost. The 100 percent restaurant deduction applied only to tax years 2021 and 2022 and no longer applies.

What to keep

Keep the itemised receipt and write on it who was present, their business relationship to you and what the business purpose was. The amount is the easy part to prove and the only part the card statement gives you.

Other expenses on line 24b

Expense	Line
a coffee meeting	Schedule C, Line 24b
a meal at a conference	Schedule C, Line 24b
a staff holiday party	Schedule C, Line 24b
a team meal for employees	Schedule C, Line 24b
your own meals while traveling overnight	Schedule C, Line 24b

Related lookups

Sources

This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.

Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.

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