Meals and Entertainment: What’s Deductible in 2025?

As a small business owner, you’ve likely asked yourself: “Are business meals deductible in 2025?” or “Can I still deduct client entertainment expenses?” The rules around meals and entertainment deductions have shifted over the years, and 2025 is no exception. Understanding what qualifies, what doesn’t, and how to document it properly can mean the difference between saving thousands on taxes—or triggering unwanted IRS attention.

At Business Advisory and Accounting Partners (B.A.A.P.), we remind clients: any CPA firm can record history. Our firm will help you build a future. That means knowing not only today’s IRS rules but also planning strategically to keep your business as tax-efficient as possible.

What meals are tax deductible in 2025?

The IRS still allows deductions for meals that are ordinary and necessary for conducting business. This includes:

• Client meals where business is discussed (50% deductible).
• Employee meals during business travel (50% deductible).
• Meals provided for the convenience of the employer, such as late-night staff dinners during busy season (50% deductible).

Some meals may still qualify for 100% deduction, such as:

• Food provided at company-wide employee events (like holiday parties).
• Meals included as taxable compensation to employees.

Can I deduct client entertainment expenses in 2025?

In most cases, entertainment expenses are not deductible under IRS rules. That means sporting events, concerts, or golf outings with clients are generally off the table as write-offs. However, if you purchase meals during these outings and they are billed separately, the meals portion may still be deductible.

This is where many small business owners stumble—thinking the full entertainment cost is deductible. The IRS has been clear: business entertainment expenses are not deductible in 2025, except in very limited circumstances outlined in IRS Publication 463.

How can I use AI tools to track business meals for tax deductions?

AI-powered tools like ChatGPT, Copilot, or Claude can help you build systems that simplify compliance. For example:

• ChatGPT can draft meal documentation templates you customize for your employees.
• Copilot can help integrate expense categorization into Excel or QuickBooks.
• Claude can summarize IRS guidance in plain English for your team.

Instead of scrambling at year-end, use AI to log details—who attended, what was discussed, and why it was business-related—at the time of each meal. This creates an audit-ready record.

What counts as a deductible business meal example?

Let’s look at Casey, a restaurant operator with $2.5M in revenue. Casey often meets vendors and potential investors over lunch. By clearly documenting the purpose and attendees in a digital expense log, Casey deducts 50% of those meals.

Meanwhile, when Casey throws an annual staff appreciation party with catering, the cost is 100% deductible. But the baseball tickets for a supplier? Not deductible. The meal at the stadium café before the game? Potentially deductible at 50%—but only if documented separately.

This proactive approach ensures Casey maximizes deductions while avoiding IRS audit triggers.

What’s the best way to plan meals and entertainment deductions?

The IRS rules on meals and entertainment 2025 can feel like a moving target. That’s why small business owners benefit from treating their CPA not as a historian, but as a strategic business advisor. With forward planning, you can:

• Identify which meals qualify for 50% vs. 100%.
• Avoid mistakenly deducting entertainment.
• Use technology to streamline compliance.
• Build tax efficiency into your broader financial plan.

At B.A.A.P., we see meals and entertainment not just as a deduction but as part of a long-term wealth strategy—because every saved dollar is a reinvestment opportunity.

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