Is The Pastor’s Lunch Tax Deductible?

By Aleshia Redding

Look at the daily to-do list of most pastors and ministry leaders and you will see that a lot of ministry happens over meals. It always seems like the best conversations happen over lunch. Guest speaker in town? Let’s connect over a meal. Church planning meeting? Time to order in! Just need to get in fellowship time? Let’s meet at the restaurant around the corner. Pastoring and eating seem to come hand in hand. 

The problem arises when you realize not all of these meals are tax-deductible. Some lunches can be reimbursed, while others cannot. 

Believe it or not, there are governmental regulations that specifically address how pastors’ meals are handled. In this article, I want to give you some guidelines to help you understand which meals fall into which category. 

Did you know that the IRS cares about your lunch? 

The IRS has regulations that cover a wide range of financial transactions, including all eating-related expenses. 

According to the IRS Publication 463, any meal is considered an entertainment expense. Don’t worry, this isn’t a bad thing; entertainment is just a category, but you do need to make sure that your meals are tax-deductible. 

What makes a pastor’s lunch tax-deductible? 

Pastors often take guest speakers out to lunch after services and pay for the lunch out-of-pocket with a plan to request reimbursement later. However, this is considered an entertainment expense and must meet one of two tests: the directly-related test or the associated test. 

The expense must pass one of these two tests to be considered tax-deductible. 

To pass the directly-related test for entertainment expenses (including entertainment-related meals), you must show that:

• The main purpose of the entertainment was to actively conduct church-related business (like planning a church event, make hiring decisions, budgeting, etc.); 
• You engaged in business with the person during the entertainment period; and
• You had more than a general expectation of receiving income or some other specific business benefit at some future time (like having a meeting to plan a conference or other church activity).

For Example, Pastor Tom was scheduled to have a meeting with his church’s men’s minister. The meeting was scheduled around 11am, but Pastor Tom’s previous meeting ran long. By the time Pastor Tom was able to meet with his men’s minister, it was well into the lunch hour. With church-related business to discuss, Pastor Tom suggested they meet over lunch. This meal would fall within the acceptable guidelines of being directly-related. 

If the expense doesn’t pass the directly-related test, it must pass the associated test. In this case, the activity must 

• Be associated with the active conduct of your ministry, and  
• Occur directly before or after a substantial business discussion. (This is generally the case when guest speakers are taken out to lunch right after church is over.)

For Example, Minister Angela led a conference planning meeting at her church that lasted through dinner time. Having successfully planned this year’s conference, her team was tired and hungry. Minister Angela called a local pizza facility and had them deliver a few large pizzas for her team to eat. This falls within the guidelines of the associated test. 

Whose lunch counts?

It’s clear from the above examples that Pastor Tom and his men’s minister’s meal would be covered. But, what about if Pastor Tom happened to have a friend with him that day? Would that person’s meal be qualified?

Meals for those who are not included in the conduct of business are not covered. But the spouse of a business associate may be included if it is not feasible to conduct that business meeting without the spouse present. This is common when a guest speaker visits a church and brings his or her spouse for the trip. 

Steps to document a pastor’s meal expense

1. Print a receipt
2. Write the name of who was at the lunch and what department should be expensed
3. Turn the receipt into the church Treasurer

Let your lunch launch you into success! 

Be at peace. At StartCHURCH, we have dedicated ourselves to serving you well by educating you on the financial responsibilities of your church or ministry. Be confident that your hard work has not gone unnoticed. Your vision and passion have established and fueled your organization. Continue to use all the tools that got you to that place, including lunch. 

Our job is to help you take your administration to the next level. We want to help you do what it takes to maintain the best financial standards possible.

This is why our bookkeeping service is such an outstanding service. With our service, you have a qualified bookkeeper taking the stress of reconciling your books in an orderly and efficient manager. And this bookkeeper also keeps watch over your financial movements and notifies you if your ministry is in danger of making one of the mistakes noted earlier in this article. 

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