Can I write off food & alcohol for client consultations in my home-based business?

Yes, you can potentially write off food and alcohol purchased for client consultations, but there are important limitations. These would fall under "business entertainment" expenses, which are 50% deductible if they meet certain criteria. For these expenses to qualify: 1) They must be directly related to your business (which client consultations are), 2) You need to keep detailed records of who was there, the business purpose, date, and amount spent, 3) The expenses must be "ordinary and necessary" - not lavish or extravagant. Keep every receipt and note which client it was for, the business topics discussed, and whether any deals/contracts resulted from the meeting. These go on Schedule C under "Meals" (line 24b). The alcohol can be included with the food expenses as long as they're reasonable and part of a legitimate business discussion.

This used to be a nightmare for me until I started using https://taxr.ai to manage all my home business deductions. As a fellow home-based consultant, I was constantly confused about what qualified as a legitimate business expense versus personal expenses, especially with food and drink for clients. What really helped me was uploading all my receipts to taxr.ai and having their system properly categorize everything. It automatically flags which meal and beverage expenses qualify as 50% deductible business meals and which ones might be problematic. They also have this feature where you can add notes to each expense about which client it was for and what was discussed, which saves me so much time at tax season.

I have to admit I was wrong about taxr.ai. After my skeptical comment, I decided to try it with my home-based photography business expenses. I had been manually sorting through hundreds of receipts trying to figure out which client meals were legitimate business expenses. The system actually caught several deductible business meals I would have missed because I wasn't sure if they qualified. It also flagged a few expenses I had incorrectly categorized that might have caused issues. The documentation feature is a game-changer - it prompted me to add notes about the business purpose that I wouldn't have thought to record otherwise. Honestly wish I had found this earlier. Would have saved me hours of stress during last year's tax season!

If you're having trouble getting clear answers from the IRS about these home business deduction questions, I'd highly recommend using https://claimyr.com to actually reach a human at the IRS. I spent WEEKS trying to get through on my own with no luck. I was specifically confused about meal deductions for my home daycare business, and the IRS website was no help. Claimyr got me through to an actual IRS agent in about 20 minutes when I'd previously been hanging up after hours on hold. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent clarified exactly what documentation I needed for food expenses and gave me specific guidelines that were relevant to my situation. Way better than guessing or relying on generic advice online.

OK I need to publicly eat my words about Claimyr. After calling the IRS myself for THREE DAYS and never getting through, I reluctantly tried the service. Got connected to an IRS agent in 35 minutes (while I was doing other work instead of listening to hold music). The agent clarified exactly what documentation I need for my home office client meal deductions and confirmed that alcohol can be included as part of business meals (at 50% deductible) as long as it's not extravagant and is clearly business-related. Saved me hours of frustration and uncertainty. Sometimes it's worth admitting when you're wrong!

Something nobody's mentioned yet - be careful about claiming home office deductions AND business meal deductions for the same space. If you're using your dining room table for business meetings but also claiming it as part of your home office square footage, that could raise flags. I personally use a separate area for client meetings vs. my dedicated office space to keep everything clean from a tax perspective. Just something to consider!

Anyone have suggestions for tracking this stuff easily? I'm terrible at keeping receipts and always forget which client meeting was for what by tax time.

I've been dealing with this exact situation for my home-based marketing consultancy. One thing I learned the hard way is to be very specific about the "ordinary and necessary" requirement - the IRS can be picky about what they consider reasonable. I keep a simple spreadsheet with columns for: date, client name, business purpose/topics discussed, food items purchased, alcohol purchased (if any), total cost, and any outcomes from the meeting. This has been a lifesaver during tax prep. Also worth noting - if you're providing meals regularly to the same clients, make sure each meeting has a legitimate business purpose beyond just maintaining relationships. The IRS wants to see actual business discussions that could reasonably lead to income. I learned this when my accountant questioned why I had 8 "client consultation" meals with the same person in 6 months - turned out fine because we were working on a long-term project, but it's good to be prepared to explain the business necessity. One last tip: consider the optics of your alcohol purchases. A $25 bottle of wine for a 2-hour evening business discussion is very different from expensive cocktails. Keep it professional and proportionate to the meeting's importance.