Business Tax Write-off's for Charity Lunch Meeting - What Documentation Needed for Restaurant Expense?

Yes, you can definitely write off business meals as a tax deduction, but you'll need to be careful with documentation since the IRS looks closely at these expenses. To properly document a business meal expense, keep the itemized receipt (not just the credit card slip), write on the back who you met with and their company, and make notes about what was discussed related to your charity business. The IRS wants to see that this was genuinely a business discussion, not just a social meal. Since your charity is still being incorporated, make sure you're tracking these expenses separately so you can properly categorize them later. Remember that business meals are currently 50% deductible in most cases - not 100%. Also, the meal can't be "lavish or extravagant," so reasonable restaurants are fine. If this vendor becomes someone you work with, having this documentation will create a clear record of the business relationship from the beginning.

This might sound silly, but I was in a similar situation last year with my nonprofit startup. I was drowning in receipts and trying to figure out which ones could be written off. I started using this tool called taxr.ai (https://taxr.ai) that seriously saved me so much time and headache with my charity's tax documentation. For situations exactly like this restaurant meeting, I would just snap a pic of the receipt, and the system would help categorize it and tell me what additional info I needed to document. It flagged the business meal receipts that were missing notes about who I met with or what we discussed. Saved me from potentially triggering an audit by having incomplete documentation. It also helped me understand which startup costs could be deducted right away vs. what needed to be amortized over time. Really helpful when you're in that incorporation limbo phase!

I was super skeptical about using yet another tax app, but I finally tried taxr.ai after seeing it mentioned here. Seriously wish I'd found it sooner! Just last month I had a similar situation with business lunch meetings for my small nonprofit. The documentation guidance was exactly what I needed - it prompted me to record who I met with, the business purpose, and even flagged when I forgot to note down what we discussed about potential services. Saved me from having incomplete records that could have caused problems later. The best part was when I had my quarterly meeting with my accountant - she was impressed with how organized everything was and said the documentation would absolutely stand up to IRS requirements. No more shoebox of random receipts with question marks!

I see a lot of advice here about documentation, but honestly the biggest headache with business expenses for me was when I had questions about specific deductions and couldn't get through to the IRS. Spent HOURS on hold and got disconnected twice. Finally used this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in about 15 minutes. They have this demo video showing how it works: https://youtu.be/_kiP6q8DX5c The agent clarified exactly how to handle meal expenses for a charity that's mid-incorporation (turns out it matters whether you're filing as a 501(c)(3) or something else). Also confirmed what records I needed to keep. Honestly saved me from making some mistakes that would have been a pain to fix later.

Ok I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it anyway because I had some complicated questions about business meal deductions that online research wasn't answering clearly. Got connected to an IRS agent in about 20 minutes (was told there was higher than normal call volume). The agent walked me through exactly what documentation I needed for business meals when operating as a fiscal sponsor before getting 501(c)(3) status. Turns out I was keeping more documentation than necessary in some areas and not enough in others. For anyone in a similar situation as the original poster, the agent confirmed you need: 1) itemized receipt, 2) record of who attended, 3) business purpose noted, and 4) record of the business discussion. They also mentioned that if you're still incorporating, keep everything organized so you can properly categorize once your status is finalized.

Don't overlook the fact that the deduction for meals is generally limited to 50% of the cost. There are some exceptions, but for a typical business meal with a vendor, you'll only be able to deduct half. Also, make sure the cost is "reasonable" - the IRS doesn't define exactly what that means, but obviously don't try to write off a $500 lunch for two people.

Has anyone tried using their phone to record the conversation during these business meals instead of taking notes? Seems like it would be easier and more thorough.

Something else to consider - if you're still incorporating the charity, these might be startup costs rather than regular business expenses. The IRS allows you to deduct up to $5,000 in startup costs in your first year of business, with the rest amortized over 15 years. But the meal would still be subject to the 50% limitation within that startup cost category.