Can I write off meals for family contractors who worked on my property

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.

Did you pay them for the work? Were they treated as employees or as contractors with a 1099?

Casey said:
Did you pay them for the work? Were they treated as employees or as contractors with a 1099?

Yes, they were paid as contractors.

Luca said:

Casey said:
Did you pay them for the work? Were they treated as employees or as contractors with a 1099?

Yes, they were paid as contractors.

Are you counting the meals and lodging as part of what you paid them?

@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?

What do you mean by hospitality meals?

@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.

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?

@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.

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.

@Casey
Got it. It’s tempting since it was a lot of food, but I’ll skip it. Thanks for walking me through this.

@Casey
Sidebar question: How important is it that I issue them 1099s? I didn’t get their SSNs. I paid one $1,500 and the other $2,100.

Luca said:
@Casey
Sidebar question: How important is it that I issue them 1099s? I didn’t get their SSNs. I paid one $1,500 and the other $2,100.

You really should issue 1099s for those amounts. It’s better to handle it now than deal with issues later.

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.

You can deduct it if the food was part of what you paid them for their work.

Fitz said:
You can deduct it if the food was part of what you paid them for their work.

Just don’t overdo it. Stick to reasonable costs, maybe what the GSA allows for meals in your area.

Fitz said:
You can deduct it if the food was part of what you paid them for their work.

So if I 1099 them for the meals too, it’s deductible?

Luca said:

Fitz said:
You can deduct it if the food was part of what you paid them for their work.

So if I 1099 them for the meals too, it’s deductible?

Exactly. The meals count as part of what you paid them, so they’d need to handle the tax on it.

@Fitz
Do you 1099 your staff for snacks or coffee in the office? Just wondering how this compares.