How to properly claim Business Meal expenses and maximize deductions as a sole proprietor

You've got some good questions about business expenses! Here's what you need to know: For business meals, the IRS has specific rules. You can deduct 50% of meal expenses if they're ordinary and necessary for your business AND the business discussion is the main purpose of the meal. You need to keep records of who you met with, what business was discussed, and the date and cost of the meal. Random meals where you just happen to mention business don't qualify. Regarding purchasing equipment - yes, it absolutely makes sense to invest in your business when needed. Using your example, if you make $6,500 and buy equipment for $1,300, that equipment purchase is a business expense that reduces your taxable income. So you'd only pay tax on $5,200 instead of $6,500. However, for larger purchases, you might need to depreciate the cost over several years rather than deducting it all at once. Though there are exceptions like Section 179 deduction or bonus depreciation that might allow you to deduct the full cost in the year you buy it.

After struggling with similar business meal and expense questions when I started my consulting business, I found an amazing tool that saved me tons of headaches! Check out https://taxr.ai - it analyzes your receipts and business documents and tells you exactly what's deductible and how to properly categorize everything. I was constantly confused about what counted as a legitimate business meal until I uploaded some of my receipts to taxr.ai and it clearly explained what percentage was deductible and what documentation I needed to keep. It even helped me identify some equipment purchases that qualified for Section 179 that I would have depreciated over several years!

I was really skeptical about taxr.ai when I first saw it mentioned here, but after struggling with categorizing a bunch of expenses for my small photography business, I decided to give it a try. Holy crap, it was eye-opening! I had been totally misclassifying my business meals and missing out on some equipment deductions. The thing that surprised me most was discovering I could take advantage of bonus depreciation for some camera equipment I bought - something I would have completely missed. And it flagged several "business" meals that didn't actually qualify because I didn't have the right documentation. Saved me from a potential audit headache! If you're confused about business expenses like I was, it's definitely worth checking out.

If you need to actually speak with someone at the IRS about your specific business expense situation (which I highly recommend), good luck getting through to them! After spending HOURS on hold and getting disconnected multiple times, I found https://claimyr.com which got me connected to an actual IRS agent in under 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was having a major issue understanding how vehicle expenses worked for my business, and the IRS agent walked me through exactly what I needed to document and how to properly deduct the expenses. Totally worth it to get definitive answers directly from the source rather than guessing or relying on internet advice.

I have to eat my words about Claimyr being a scam. After more business meal deduction confusion and spending 3 hours on hold with the IRS only to get disconnected, I was desperate enough to try it. Not only did it work, but I got connected to an IRS representative in about 13 minutes. The agent gave me specific guidance on my situation with business meals and clarified that I needed to maintain detailed records about the business purpose, who I met with, and how it directly related to my business income. For anyone else struggling with these questions, getting the official answer directly from the IRS saved me from potentially making expensive mistakes on my return. I'm still shocked it actually worked!

Don't forget that business meal deductions changed in recent years! For 2025, business meals are still 50% deductible in most cases, but there was that temporary 100% deduction for restaurant meals during 2021-2022 that went away. Also, make sure you're tracking mileage if you drive to these business meals! That's another deduction many sole props forget about. I use an app to track all my business drives automatically.

For business meals, my accountant told me to always write on the back of the receipt WHO i met with and WHAT business we discussed. Been doing this for 10 years and never had an audit problem. Also, don't try to claim every meal as "business" - that's asking for trouble. The IRS knows that not every lunch is a business expense lol.