22

I am organized as a single member LLC. And I work from home. I see that some corporations buy their employees lunch and expense it.

My question is... Can I order lunch or go out to eat by myself and expense it?

It seems only fair because I'm an employee of my own company and I'm just buying my employee lunch and expensing it just like the other corporations.

jason
  • 385
  • 2
  • 6
  • 19
    "all corporations buy their employees lunch and expense it" - that's a bit of a broad (and untrue) generalization don't you think? – brhans Dec 07 '17 at 13:31
  • 1
    yeah. every company (about 6) that I have worked for does it. I'm sure there are exceptions, but i'm willing to bet most professional places do that for their employees. I've changed the wording to "most" – jason Dec 07 '17 at 13:55
  • 27
    @jason I've worked at lots of places, and I'm willing to bet that most don't. – Ben Miller Dec 07 '17 at 15:15
  • 1
    ok fine. I guess i have a tainted view... because of my personal experience... changing the wording to "some" – jason Dec 07 '17 at 15:44
  • 2
    Note that only 50% of meals are deductible, which means even when you can expense it you only save (in taxes) about 10-25% of the bill anyway depending on your tax rate. – TTT Dec 07 '17 at 15:59
  • 3
    It seems like there are two related things here a company expensing something and whether it's tax-deductible. A company can certainly expense transactions carried out by its employees (because they are per se done for business reasons or on the company's behalf) but that doesn't mean they are tax-deductible – eques Dec 07 '17 at 21:39
  • Not familiar with US law, but in some countries companies get a small amount that they can spend on employees 'freely' and get deductions on that. For the remainder they can spend it on their employees (and thus deduce it from profit?) but the benefits may then be seen as income and taxable as income tax. – Dennis Jaheruddin Dec 08 '17 at 10:51
  • What is an LLC? – henning Dec 08 '17 at 11:26
  • 1
    @henning a Limited liability company https://en.wikipedia.org/wiki/Limited_liability_company – ʰᵈˑ Dec 08 '17 at 13:43

1 Answers1

32

It depends. If you’re on a business trip or entertaining a client then yes. However, regular lunches are not deductible on your taxes since it isn’t a business need.

As always, when in doubt, work with a certified accountant.

Edit: Here is a Quickbooks article on that topic.

Michael
  • 10,208
  • 4
  • 24
  • 56
  • 2
    Thanks for the link... "Lunches and dinners brought in to facilitate working through lunch or working late also count." ... interesting... so this means if I order in and work through lunch it's deductible, but if I go out and eat... that's not deductible. – jason Dec 07 '17 at 14:04
  • In my case, I do have a business need... I'm a financial professional and the markets are open during lunch, so I have to monitor the movements of the markets and therefore sometimes don't have time to go out or even make lunch... in that case... i have a pretty strong case for "business need" right? – jason Dec 07 '17 at 14:15
  • 34
    @jason It isn't Michael you need to convince, is the IRS auditor who handles your file. If you're comfortable with that audit, then go ahead, but no amount of "Stackexchange said I could!" will help you if you're wrong. – Grade 'Eh' Bacon Dec 07 '17 at 14:16
  • 3
    @ Grade... haha... i hear ya! I'm just trying to be sure I'm not crazy and its reasonable... and people on stack exchange are reasonable... so if most people agree then I would be comfortable with that audit... it's basically just a sanity check. but i hear you on your comment. – jason Dec 07 '17 at 14:18
  • 8
    @jason Remember that it says occasional snack/meal in that section you quoted. – Hart CO Dec 07 '17 at 15:14
  • 1
    @jason Is there something wrong with preparing lunch several hours before eating it? Or eating a few hours earlier/later? – Acccumulation Dec 07 '17 at 18:55
  • 7
    I would bet you a lunch that the IRS isn't going to let you deduct the cost of lunch every day. Just because your business requires you work through lunch, does not change that lunch from something you'd have to do for ordinary personal care. To make an analogy, you could argue that your work requires you be in a particular office every day; that wouldn't make your daily commute a deductible expense. – stannius Dec 07 '17 at 20:23
  • 1
    It seems like the answer is answering a different question from what is asked. The two links you provide (and many comments) are talking about deducting lunch expense on your taxes. The OP asked whether his company can buy his lunch. As long as your company finds a business need to buy lunch/dinner, I don't see the problem (as a non-tax-expert). Now, I could imagine that the IRS would want to tax the recipient as getting additional income for his daily lunch expense, but if true (and it may or may not be) at least the employee gets a good percentage of the meal for free. – Seth Robertson Dec 08 '17 at 00:06
  • @SethRobertson Since Jason is both the employee and the company, the lunch money will come from his pocket either way. – Dmitry Grigoryev Dec 08 '17 at 01:20
  • A financial professional that needs to deduct lunch money during a bull market.. oh boy. 🙊 – NuWin Dec 08 '17 at 08:13
  • 2
    @stannius Your analogy breaks down in Germany though. German tax law knows "Entfernungspauschale" aka "Pendlerpauschale" which is exactly that: tax reduction for your daily travel distance to work ;) – k0pernikus Dec 08 '17 at 08:33
  • @stannius That bet isn't fair. If you lose, you can expense your lunch. When they lose, they can't :) – Philipp Dec 08 '17 at 09:43
  • @k0pernikus That's interesting but the question is about the US. (For what it's worth, travel to your ordinary place of work isn't tax-deductible in the UK, either.) – David Richerby Dec 08 '17 at 11:18
  • 1
    @DavidRicherby Yes, I realize it is US-specific. My point is that the basic reasoning that anything that is necessary to allow you to work should be tax deductible is not that far-fetched of an idea. If and how states implement that notion is a different matter. – k0pernikus Dec 08 '17 at 13:59
  • Same in Japan, it's paid by the company and not taxable, up to a certain amount of course. – None Nov 12 '23 at 14:48