Like millions of other people, there’s a good chance you need your morning coffee to get up to speed and reach peak performance. As a business owner, you may find yourself buying quite a bit of coffee. Not only do you need this for yourself, but you also supply it for the office. After all, you want your workers to be as productive as possible.
There’s only one problem with this: The cost of coffee can quickly add up. With this in mind, there’s an important question to answer: Is coffee for the office tax-deductible?
There is no simple answer to this question, as each company approaches food and beverages for the office in a different way. Generally speaking, coffee for the office is tax-deductible as the IRS typically considers this item a fringe benefit.
Note: if you purchase coffee related supplies for the office, such as a coffee maker, it can also qualify as a tax deduction.
Before you deduct coffee as a business expense, let’s look at some of the things that must come into play in order to qualify as a tax deduction:
- The expense is reasonable (deducting $100k per year for coffee is a red flag)
- The coffee is purchased by the employer and provided to employees
- The coffee is provided to improve productivity, provide a better work environment, or to offer some other type of benefit to employees
What to do next
At this point, you may assume that coffee for the office is tax-deductible. And while you may be right, there are still a few things you’ll want to do:
- Discuss this expense with your tax professional
- Create a system for tracking all coffee related expenses (in case of a tax audit)
- Stay current with any IRS rules and regulations that impact your deduction
So, there you have it. If you’re buying coffee for the office, you might as well consider if it’s tax-deductible. There’s no point in missing out on a deduction that can save you money.