If the employees eat in an employer operated eating facility and the employees are provided meals for the convenience of the employer, the meal is an excludible fringe benefit under Sec. 132(e)(2) and the employer may deduct 100% of the meal costs under Sec. 274(n)(2)(B).
19 February 2008 | My twist on this is for employer provided meals while at a job site. I have a client who send his guys all over the world to install his product. They maybe gone two days or two weeks. Are the meals the company pays for during these jobs 100% deductible? They are on the job working for the employers convenience?
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Discussion:100% meal deductionFrom TaxAlmanac, A Free Online Resource for Tax ProfessionalsNote: You are using this website at your own risk, subject to our Disclaimer andWebsite Use and Contribution Terms.Discussion Forum Index --> Tax Questions --> 100% meal deduction
| Www.cpa1.biz (talk|edits) said: | 22 April 2006 | | When should a taxpayer take the whole 100% meal deduction when they have a Schedule C and why does like any employee not take a 50% meal deduction on the form 2106 just for everyday lunches that they do not get reimbused from their employer. Please enlighten.Thanks,www.cpa1.biz |
| Sandysea (talk|edits) said: | 22 April 2006 | | M&E are deductible at 50% generally and a Schedule C will take this 50% deduction as it relates to his/her business.Employees do not file Form 2106 arbitrarily. They file this form if they have ordinary expenses related to their employment that are not reimbursed by the employer such as overnight travel or entertaining customers or clients. You cannot deduct the cost of simply having lunch as being an unreimbursed employee business expense. The expense has to be for the benefit of your employer.... |
| Www.cpa1.biz (talk|edits) said: | 22 April 2006 | | Thanks a lot Sandy..have a good weekend....www.cpa1.biz |
| Jdugancpa (talk|edits) said: | 22 April 2006 | | There are certain instances where 100% deduction is allowed for M&E. Meals consumed on employer's premises for the convenience of the employer are 100% deductible (e.g., that pizza I ate at 8:00pm in my office during tax season). Meals that are billed out to client/customer and separately stated are 100% deductible to the biller and 50% deductible to the billee (e.g., travel expenses, including meals, that are billed out to the client as a reimbursable expense are 100% deductible, but the client may only deduct 50%).As to deducting everyday lunches on Form 2106, meals are deductible when there is a business connection. When I go the Wendy's day after day, there is no business connection, and thus no deduction is allowed. |
| LJACPA (talk|edits) said: | 22 April 2006 | | My business is an S corp and, as such, I am not considered an employee for purposes of the 'for the convenience of the employer' 100% deduction (or any deduction that I know of). So, my pizza at 8:00 is not deductible. How do you deduct yours???? |
| Dennis (talk|edits) said: | 22 April 2006 | | Employees' leftovers? (so I ordered too much, sue me.) |
| Tess (talk|edits) said: | 22 April 2006 | | Wouldn't a Christmas party and the meal or a summer picnic be 100% deductible to the business owner? where i work we have a pizza party every quarter if there are not lost time accidents, wouldn't this alos be 100% deductible to the owner? |
| Jdugancpa (talk|edits) said: | 22 April 2006 | | "Office Supplies"? |
| Deback (talk|edits) said: | 22 April 2006 | | I usually deduct 100% for office party food and supplies under Supplies. |
| Pete10 (talk|edits) said: | 30 November 2006 | | If an S-Corp bills it clients the per diem rate for meal cost, can they write off 100% or do you have to bill them for the actual cost in order to get the deduction for 100%? |
| Natalie (talk|edits) said: | November 30, 2006 | | Dennis - you crack me up! As far as the office parties go, wouldn't they qualify as de minimis fringe benefits? I realize they often get reported under office expense or supplies, but I've always thought of them as another benefit. |
| AHH (talk|edits) said: | 30 November 2006 | | Has anyone heard of the "merchant sailor meal allowance"? = employed as a tug/barge sailor(transportation industry) and allowed to use the M&IE per diem rate, reduced by employer provided grocery allowance, and then deduct 100% of remaining for their meal allowance. Check out SailorTax.com. I have several tug boat captains who INSIST on this deduction using Form 2106. |
| Death&Taxes (talk|edits) said: | 30 November 2006 | | You might read the recent Bissonette decision in the US Tax Court; I don't recall this method being used there, and he captained a ferry on Puget Sound. |
| MsTwizz (talk|edits) said: | 2 February 2007 | | So, owners of a retail shop buying their lunch and eating at the shop isn't deductible in any way. But, if they buy a pizza for them and all the employees and maybe talk about business in the process, it is deductible, but 50% deductible?I am a sole shareholder of an S-corp and sometimes I buy a sandwich and eat it in as I'm working, as LJACPA says, since I am not in an employer/employee situation, it is not dedcutible? But the IRS makes me pay myself with W-2 wages, so in that respect and am the employer and the employee. It's sooooo confusing!Can anybody point me to specific regs to read....I'm going to look them up. |
| Pegoo (talk|edits) said: | 2 February 2007 | | The IRS is trying to keep people slim. What would happen if they allowed the 100% for general business purposes (feeding the boss)? OBCT!! O.o |
| Johnspokes (talk|edits) said: | 11 February 2007 | | So am I to take it that a restaurant whose workers get a free meal during their shift can't get a deduction for it? Presumably because the cost of ingredients and paid time is already an expense? |
| Deback (talk|edits) said: | February 11, 2007 | | Yes, the cost of the food will be included in cost of goods sold. |
| Riley2 (talk|edits) said: | 12 February 2007 | | If the employees eat in an employer operated eating facility and the employees are provided meals for the convenience of the employer, the meal is an excludible fringe benefit under Sec. 132(e)(2) and the employer may deduct 100% of the meal costs under Sec. 274(n)(2)(B). |
| LJACPA (talk|edits) said: | 12 February 2007 | | MsTwizz, there are a number of situations where a >2% s/h, though a bona fide W-2 employee, is not considered an employees. One is for meals, another is participation in a Section 125 plan. I'll let Riley give you a cite. |
| Mendhasj (talk|edits) said: | 19 February 2008 | | My twist on this is for employer provided meals while at a job site. I have a client who send his guys all over the world to install his product. They maybe gone two days or two weeks. Are the meals the company pays for during these jobs 100% deductible? They are on the job working for the employers convenience? |
| Wjpcfo (talk|edits) said: | 15 May 2008 | | The following is the specific situation I have. I work for an LLC. There are two members (owners) of the LLC that are active in the business. They work 12+ hour days and rarely leave the office. So that they can continue working throughout the day, they have both their breakfast and lunch brought in. Are these meals 100% of 50% deductible? Thanks in advance for any guidance. |
| Marcilio (talk|edits) said: | 15 May 2008 | | Why would those meals be deductible at all? |
| Death&Taxes (talk|edits) said: | 15 May 2008 | | Try zero percent deductible. See Publication 463 They are neither out of town in travel status, nor are they entertaining anyone.Would be neat if they were deductible. During tax season I walk from my bedroom, through the kitchen and to my office. I set the coffee to drip, put some toast on, and begin to work. Same with lunch; gee, if I can get this I will get an account at the local Dunkin Donut to prove my costs and start deducting. |
| Marcilio (talk|edits) said: | 15 May 2008 | | Is the marmalade deductible? |
| BEGooding (talk|edits) said: | May 15, 2008 | | "Employees forced to eat meals provided by employer for the convenience of the employer" sounds like a good episode premise for The Office. Think tofu, brussel sprouts, anchovies etc. |
| Riley2 (talk|edits) said: | 16 May 2008 | | No deduction at all available unless they become employees. |
| Jdugancpa (talk|edits) said: | 16 May 2008 | | Riley, are you saying that electing to tax the LLC as a corp and paying salaries to the two owners will make breakfast and lunch deductible in this case??? As an employee of my own S corp, will my lunch be deductible if I eat it here in the office? |
| Death&Taxes (talk|edits) said: | 16 May 2008 | | JD. Here is my favorite case on these lines: http://www.projectposner.org/case/1985/758F2d211 |
| Natalie (talk|edits) said: | May 16, 2008 | | Thanks for the link, D&T. That's a great summary. |
| Marcilio (talk|edits) said: | 16 May 2008 | | Agreed D&T..it's a classic |
| Death&Taxes (talk|edits) said: | 16 May 2008 | | Today I've been busy moving the bottled hot and cold water dispenser and the fridge from the kitchen into my office. Now if I can only find an open outlet where I can plug in the microwave, the coffee maker and the toaster, I am set. Great to be a C Corp; this is one benefit JR never talks about. |
| Kevinh5 (talk|edits) said: | 16 May 2008 | | I know tax professionals who take their morning dump at the office because the toilet paper is deductible there, but not at home. Same theory? |
| Death&Taxes (talk|edits) said: | 16 May 2008 | | Good lord, Kevin, I am not about to move the toilet into this little room. It would ruin the ambience. |
| Jdugancpa (talk|edits) said: | 16 May 2008 | | D&T, just buy a roll of TP, charge it to office supplies and carry it from office to bathroom whenever it is needed during work hours. |
| Sandysea (talk|edits) said: | 16 May 2008 | | Can I then just have ham/brie/onions in frig and make it a lunch that I can deduct my own food? WAYYYY COOL!!!Think I may get Direct TV here too...of course to watch the news so it is deductible too. What if I put a mattress on the floor? I may never go to my apartment again!!! hehehehe |
| EAdamsCPA (talk|edits) said: | 5 August 2008 | | Ok, so my company has sales employees who travel every day to multiple client sites. Some of them have long drives home and may not get home before 9pm. According to the IRS website, meals are only deductible if there is an overnight stay or the trip is "long enough that you need to stop for sleep or rest to perform your duties." Does anyone know what the period of time is? I know in U.S. v. Correll, the taxpayer lost when he was only getting 15-20 mins rest at a rest area on the way home. But in Williams v. Patterson the taxpayer rented a room for 6 hrs to get rest and was allowed the deduction. And in Rev. Rul. 75-168, a truck driver was allowed the deduction if his layover was 8 hrs. There's a lot of time between 15-20 mins and 6 hrs that is kind of a gray area. If our salespeople stop to rest for 1.5 - 2 hrs and eat a meal, would that be deductible?15:27, 5 August 2008 (CDT)~~ |
| CrowJD (talk|edits) said: | 5 August 2008 | | Your typical Federal employee will sleep two hours out of eight. Therefore, I think you can take that as a rule of thumb most would accept. It's not just rest your looking for, they have to be dead asleep: head down, slobber, the whole thing. So, leaving time for wolfing down a meal, the minimum would be 2 hours, 20 minutes. |
| Kevinh5 (talk|edits) said: | 5 August 2008 | | you mean out of an 8 hour workday, don't you Crow? |
| CrowJD (talk|edits) said: | 5 August 2008 | | That's right, two hours out of the work day. I didn't want to come right out and say that, just in case this is ever analyzed under the cold light of a courtroom...with me in the dock.To get back to anwering the question, I once had an agent tell me that you are not tired until you hit a mile post marker, or at least graze one. So, I tell my employees not to pull over unless they have knocked a few of those things over. |
| Kevinh5 (talk|edits) said: | 10 January 2009 | | (Post by a consumer removed - should have been posted in the Consumer Forum. User notified on his Talk page.) |
| Johnsmitharkansas (talk|edits) said: | 15 April 2010 | | The client owns an S-corp and is one of the employees at his business (hotel). He, like most owner/operators, works a large number of hours but only pays himself a very small amount. Anyways, he occasionally buys lunch so that he can work during his lunch break (just operate the front office while eating). Would he qualify for the 100% meal deduction? |
| Johnsmitharkansas (talk|edits) said: | 15 April 2010 | | The client owns an S-corp and is one of the employees at his business (hotel). He, like most owner/operators, works a large number of hours but only pays himself a very small amount. Anyways, he occasionally buys lunch so that he can work during his lunch break (just operate the front office while eating). Would he qualify for the 100% meal deduction?John K. Smith Little Rock, Arkansas |
| Trillium (talk|edits) said: | 15 April 2010 | | Johnsmithetc - please click "talk" next to your name above to get to your talk page for a note about how to switch to a shorter user name; thanks. |
| SunnyCA (talk|edits) said: | 5 August 2011 | | Hello,Is the 100% deduction for employees eating meals at the employer's office for the convenience of the employer still deductible 100%? I researched this on the IRS website and can't locate anything current and there is not a place in Lacerte to enter this that I can locate. I see the 50% off meals and the 80% for Department of Transportation employees but nothing else.Also, if a client is traveling to one of their client's offices and the client stops and gets lunch for himself is that deductible at 50%? |
| Kevinh5 (talk|edits) said: | 6 August 2011 | | The deduction isn't for the employee, the deduction is for the employer furnishing the meals. MFBE.2nd question - what does it matter what your client's client does? |
| SunnyCA (talk|edits) said: | 6 August 2011 | Regarding the 2nd question it is my client who is purchasing the meal on the way to a business engagement. He was by himself. Sorry I didn't state it very well.
Thanks |
| Kevinh5 (talk|edits) said: | 6 August 2011 | | OK - deductible only if away from his tax home on business. If he is just driving to the other side of town, and isn't entertaining the client or having lunch with the client, NO, he gets no deduction. We all eat lunch. |
| Ckenefick (talk|edits) said: | 6 August 2011 | | And the meals for the convenience of the employer fall under Sec 119 if you're looking for a cite. |
| LKSD (talk|edits) said: | 9 January 2012 | | I have a client that sends models around the country to attend various events for his company. He pays for all of their meals and transportation to and from the event site. All the models are freelance and classified as subcontractors. Can I write off 100% of the meals and transportation? |
| Mikex2e7n5 (talk|edits) said: | 9 January 2012 | | This may help answer just a few of the questions http://www.irs.gov/pub/irs-wd/1151020.pdf |
| Brucec83 (talk|edits) said: | 9 January 2012 | | I once worked for a small employer who stocked the fridge with beer and had an office meeting every dy at 5pm. Of course business was discussed and the general manager did it as a sneaky way of getting almost free overtime. He deducted it along with the office coffee, as a de minimus fringe. |
| Hammock (talk|edits) said: | 10 January 2012 | | Here's an even better way - combine two ideas from the last three posts: stock the company fridge with beer, and then bring in the models .... |
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