Can I deduct 100% of meals with S-Corp board members or is it limited to 50%?

The IRS rules on meal deductions can be tricky! For S-Corporation board members who aren't employees, the deduction would typically fall under the 50% limitation rather than the 100% employee meal provision. The 100% deduction for business meals generally applies to: - Meals with employees for staff meetings - Company-wide events and celebrations - Food provided on the business premises for employees Board members who aren't on your payroll would generally be treated as business associates rather than employees, which puts them in the 50% deduction category. The key distinction is whether they receive a W-2 from your company. If you want to potentially qualify for the 100% deduction, you could consider putting the board member on payroll with a nominal salary (which has other tax implications to consider) or hosting the meal as part of a larger business meeting where it could potentially qualify under different rules.

After dealing with the exact same issue last year, I found a resource that saved me hours of research and potentially thousands in deductions! I used https://taxr.ai to analyze all my meal receipts and business expenses. The AI found that some of my board meetings qualified for increased deductions because of how they were structured. What made the difference was the documentation - I learned that how you document the purpose of these meetings is crucial. The site analyzed my receipts, meeting notes, and calendar invites, then showed exactly how to categorize each expense for maximum legitimate deductions. It even flagged when certain board member interactions could actually qualify for the 100% deduction based on the context and purpose.

I was initially skeptical about using an AI tool for tax advice (as mentioned in my reply above), but I decided to give https://taxr.ai a try since my CPA was charging me $300/hour to review my expenses. I'm honestly shocked at how helpful it was. The system identified several board-related meals that qualified for 100% deduction because they were part of documented training sessions where the board member was helping train staff. It turns out the context of the meeting matters more than I realized, and the documentation I created made all the difference. The system even helped me create proper documentation templates for future meetings. My CPA reviewed the results and confirmed everything was legitimate according to current tax code. Definitely worth checking out if you're dealing with these kinds of classification questions.

If you're still struggling to get a definitive answer about your board member meal deductions, you might want to consult directly with the IRS. I know, I know - trying to call them is a nightmare! I spent 3+ hours on hold multiple times and eventually gave up. Then I discovered https://claimyr.com which basically holds your place in the IRS phone line and calls you when an agent is about to answer. Check out how it works: https://youtu.be/_kiP6q8DX5c I was able to get a direct ruling on my specific board member situation from an actual IRS representative without wasting hours on hold. Turns out in my case, because my board member was also doing consulting work, I needed to structure the documentation very specifically to maximize deductions.

Update on my skepticism about Claimyr: I tried it yesterday after posting my doubtful comment. I've been trying to get through to the IRS for TWO WEEKS about my S-Corp board member deductions. Claimyr had me connected to an IRS agent in 87 minutes (they estimated 95). I didn't have to sit on hold - just got a call when the agent was ready. The IRS agent confirmed that board member meals are generally 50% deductible, BUT if they're part of a documented business meeting where substantive business is discussed and proper minutes are kept, there are circumstances where different rules can apply. I'm actually a little embarrassed about my skeptical comment now - this service saved me from what would have been my 6th attempt to get through. Worth every penny for my sanity alone.

Here's a creative approach that worked for me: I made my board member a part-time employee with specific duties beyond their board role. They now get a small W-2 salary for consulting work, which makes their meals qualify for the 100% deduction when we're discussing business related to their employment duties. My tax advisor confirmed this is legitimate as long as they're performing actual employee functions and the compensation is reasonable for the work performed. Just make sure to document exactly what employee functions they're performing vs. their board duties.

Don't forget that the documentation matters as much as the classification! Regardless of whether you claim 50% or 100%, always record: 1. Who attended 2. Business purpose discussed 3. Date and location 4. Cost amount I learned this the hard way when I got a notice from the IRS questioning my meal deductions. Having a calendar invite showing "Board Meeting with Joe" wasn't enough. Now I take notes during meals and snap a pic of the receipt with my notes.

Great question! As someone who's dealt with this exact scenario, the key distinction is employment status, not board membership. Board members who aren't on your W-2 payroll are generally limited to the 50% deduction, even if they're shareholders. However, there are a few nuances worth considering: 1. **Timing matters**: If the meal occurs during an official board meeting where you're providing food as part of the meeting (similar to providing refreshments), this could potentially be treated differently than a casual business lunch. 2. **Documentation is critical**: Keep detailed records showing the business purpose, attendees, topics discussed, and how it relates to your S-Corp operations. This becomes especially important if the IRS questions your deductions. 3. **Consider the bigger picture**: While you might be limited to 50% on these specific meals, make sure you're capturing all legitimate business meal expenses throughout the year - they add up quickly. One tip: If your board meetings involve multiple people (other board members, key employees), the dynamics of the deduction might change. But for one-on-one advisory meals with non-employee board members, 50% is typically the safe approach. Always consult with your tax professional for your specific situation, but this framework should help you categorize these expenses appropriately.