Ways to Deduct Meals With Your Spouse

May 5th, 2014 at 2:21 PM

The ability to deduct meals with your spouse is simply a question of fact. Were the meals ordinary and necessary expenses for your business? Did you keep the business meals records as required by law?

The IRS is highly skeptical when it comes to business activities that have a personal element, such as meals with your spouse. Expect 2 things when you enter into this arena; a good fight with the IRS, and a need to protect yourself by having excellent business records. The records include a contemporaneous documentation of the following information for each meal:

1. The time and place of the meal
2. The amount of the meal expense
3. The business purpose of the meal
4. The names and business relationships of the people present at the meal

The restaurant receipt provide half of this required information–just write the business purpose, and the names and business relationships of the people present on the receipt.

When it comes to spousal meals I recommend writing a quick business memo that includes key information such as:

• why you had this meeting with your spouse
• what information was gained in this meeting
• names of referrals gained
• any business strategies that you plan to pursue from the meeting

Staple this extra memo to the receipt, and store the information in a safe place.

Another recommended approach to winning in this arena, is to invite a client, prospect, or business associate to join you and your spouse at the meal. When you a third party, the “closely connected” rule allows you to deduct your spouse’s meal, even if your spouse had no business reason for attending the business meal.