Meals & Entertainment

Answer:

• Meal expenses are deductible if your business trip is overnight or long enough that you need to stop for substantial sleep or rest to properly perform your duties. Meal expenses are also deductible if the meal is business-related entertainment. You can figure all your travel meal expenses using either of the following methods:
  • Actual cost. If you use this method, you must keep records of your actual cost.
  • The standard meal allowance, which is the federal meals and incidental expense (M&IE) per diem rate. The GSA website lists these rates by location. Note that lower rates apply for the first and last days of travel.
• The deduction for unreimbursed business meals is generally subject to a 50% limitation.

Additional Information:

• Tax Topic 512 – Business Entertainment Expenses
• Publication 463, Travel, Entertainment, Gift, and Car Expenses

https://www.irs.gov/help-resources/tools-faqs/faqs-for-individuals/frequently-asked-tax-questions-answers/small-business-self-employed-other-business/income-expenses/income-expenses-2

Topic 512 – Business Entertainment Expenses

You may deduct entertainment expenses that are both ordinary and necessary in carrying on your trade or business if they meet one of these two tests:

• The directly-related test, or
• The associated test

https://www.irs.gov/publications/p463/ch02.html

https://www.irs.gov/taxtopics/tc512.html

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