Schedule C Line 24b: Business Meals Deduction (50% Rule) in 2026

Published: April 17, 2026 · Reading time: 7 min

TL;DR: Business meals are 50% deductible on Schedule C Line 24b — not 100%. The TCJA (2018) cut the deduction permanently. Client lunches, working dinners, and meals while traveling qualify. Entertainment (concerts, golf, sports) does not. Document the business purpose of every meal.

The meals deduction is one of the most frequently misclaimed on Schedule C. The most common error: deducting 100% instead of 50%. The second most common: claiming entertainment as a meal.

The 50% Rule: What It Means

Since the Tax Cuts and Jobs Act (2018), business meals are 50% deductible. This is permanent — there is no exception for "ordinary business meals."

Example:

• You take a client to lunch: $80 total
• Deductible amount: $80 × 50% = $40

CentSense automatically applies the 50% rule in exports. If you scan an $80 restaurant receipt, your Schedule C export shows $40 for Line 24b — not $80.

What Qualifies as a Deductible Business Meal

Yes — deductible at 50%

• Client lunch or dinner — meal with a client, prospect, or business contact where you discussed business
• Working meal with a business partner — two freelancers meeting to discuss a joint project
• Meals while traveling overnight for business — any meal while away from home for business
• Team meals (if you have employees) — business-purpose meals with staff

No — not deductible

The entertainment trap: Taking a client to a ball game is 0% deductible. If you also buy dinner at the stadium, the meal portion is 50% deductible only if it's separately itemized on the receipt. One combined "entertainment + food" charge is not deductible.

What the IRS Requires for Documentation

The IRS requires 5 elements for each meal deduction:

A restaurant receipt alone isn't sufficient. You need the business purpose documented — even a short note.

How CentSense handles it: When you scan a restaurant receipt, CentSense prompts you to add a business purpose note. The export includes both the receipt data and your note, satisfying all 5 IRS requirements.

The $75 Receipt Rule

The IRS doesn't require a receipt for meal expenses under $75 (with some exceptions). However:

• A credit card statement showing a restaurant charge satisfies documentation for amounts under $75
• For amounts $75 and above, keep the actual receipt
• In practice, keeping all receipts regardless of amount is the safest approach

Line 24b vs. Line 24a: Travel vs. Meals

When you travel for business, meals during the trip go on Line 24b (50%), while flights and hotels go on Line 24a (100%).

Meals vs. Groceries

Groceries are not a business meal. Buying food to eat at home or at your home office is personal — it doesn't go on Schedule C.

Exception: If you buy food specifically for a business meeting at your office (meeting snacks, catered working lunch), that qualifies at 50% — keep the receipt and document the business purpose.

Common Line 24b Mistakes

Mistake 1: Claiming 100%

Every client meal is 50%. No exceptions for freelancers.

Mistake 2: Claiming entertainment as meals

Golf, concerts, and sports events are 0% deductible, period. Only food at these events is deductible (50%), and only if it's separately charged.

Mistake 3: No business purpose documentation

A restaurant receipt is not enough. Add a note: who was there, what you discussed, why it was a business meal.

Mistake 4: Deducting personal meals as business

Eating lunch alone at a restaurant on a regular workday is personal — not deductible. Travel meals (when you're away overnight for business) are the exception.

Tracking Business Meals in CentSense

CentSense maps restaurant receipts to Line 24b automatically and applies the 50% rule in your export. Add a business purpose note at scan time, and your documentation is complete.

Start tracking free → — 10 AI scans/month, no credit card required.