I own an e-commerce shop. If I go out to lunch with the intention of not only socializing with a friend but also getting him to potentially buy my product, can I write my meal off as a business expense?
Based on your situation, the answer is yes—you can write your meal off as a business expense.
From a general standpoint, you must prove that your meal qualifies for a deduction. The use of reasonable estimates is not sufficient to stand up to an IRS challenge. You must be able to establish the amount spent, the time and place, the business purpose, and the business relationship of the individuals involved. You must set up careful and detailed record-keeping procedures to keep track of each business meal and entertainment event and to justify its business connection. For expenses of $75 or more, documentary proof (receipt, etc.) is required.
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Answered by: Joseph A. Pancerella, CPA, is managing director of Pancerella & Associates LLC in Reading, Pa.