Can I deduct business meals if I pay cash?

Yes—paying cash does not by itself prevent you from deducting an eligible business meal. What matters is that the meal is a legitimate business expense and that you keep enough records to substantiate it.

For a cash meal deduction, keep records showing:

• who you met with and their business relationship
• the date
• where the meal took place
• the business purpose or discussion
• the amount paid, including tax and tip

A cash payment can be deducted just like a card payment, but it may be harder to prove if you’re audited because there’s less automatic transaction history. So keep a receipt or other contemporaneous record whenever possible.

In general, many business meals are 50% deductible under U.S. tax rules, but there are exceptions and special rules that can change the percentage or allow different treatment. Also, recordkeeping requirements can depend on the situation, so check the latest IRS guidance or a tax professional for your situation.