Hey everyone, I own a rental property in Georgia. My cousin and his partner came up from Florida to help with some work. They stayed at my place for about 4 days, and his partner stayed an extra 5 days. I provided breakfast, lunch, and dinner every day while they worked.
Can I deduct the cost of the meals? Would it be considered a hospitality expense, or is it something else? Appreciate any advice.
@Casey
Not officially. From what you’re saying, and what others mentioned, it seems like I shouldn’t deduct it. What if I count it as hospitality meals?
Luca said: @Casey
Not officially. From what you’re saying, and what others mentioned, it seems like I shouldn’t deduct it. What if I count it as hospitality meals?
Luca said: @Casey
At my company, if we take clients or employees out for meals, we can deduct 50%. I thought this might count as something similar.
If the meals were part of a business meeting, you could deduct 50%. But providing food and lodging while they worked isn’t quite the same. It’s more like travel expenses for them. Do you have receipts for the meals? Did you do anything non-work-related together?
Luca said: @Casey
It was all work. I cooked most of the meals, and I do have some receipts. They worked long days, and I just wanted to make sure they were fed.
If you deduct it, you’d need to include it as part of their income, and they’d handle the tax on their end. That’s the cleanest way.
If you’re willing to include the cost of the meals on their 1099 as part of their compensation, then yes, you can deduct it. But it also means they’ll have to pay taxes on that amount.
Ozzy said:
If you’re willing to include the cost of the meals on their 1099 as part of their compensation, then yes, you can deduct it. But it also means they’ll have to pay taxes on that amount.
That’s a no-go. I’m not going to make them pay taxes on the meals.