BergerFirst

Dutch-treat business meals

Question

I was informed by my accountant that my meals are not deductible but my client’s meals are deductible. I have about two documented business meals per week, where either of the three may happen:
  1. Show homes to clients for a prospective purchase
  2. Seek referrals
  3. Ask the prospects about the type of home they are looking

I was of the opinion that when I paid the tab for breakfast, lunch, or coffee that included me and my client, the full cost was deductible, not just the client’s or prospect’s cost.

Answer

You and your client can deduct the cost of the Dutch treat. For example, if you had been to the Dutch treat, you could deduct your cost by itself.

Maybe your accountant was misinformed about the deductibles. The business entertainment you describe suffers a 50 percent cut when your accountant takes it from your books of account to your tax return. The 50 percent may appear to you as if you can deduct only for your clients.

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