Self employed business deductions

[tayloredurogyn]

Are my meals while working 100% deductible for the 2023 tax year?

I use intuit Quickbooks self employed which allows 100% deduction of meals purchased while working however a CPA reviewed my quick books and stated there is only a 50% allowance on meals, and now I owe the federal governments thousands in back taxes, can you please help to clarify this for me?

[TeriH]

Great question!

Qualified business meals purchased from a restaurant in 2021 and 2022 are 100% deductible. However, for purchases made in 2023 and beyond, the rules established in the Tax Cuts and Jobs Act apply, which means restaurant expenses are once again subject to the 50% limit on deductibility.

Unless of course, the law changes, again.  

Best wishes,

teri

[SueI]

Here is some general information regarding meal deduction and the related IRS Publications that can help you out with determining just how much of the meal expenses are deductible.

• Generally, reimbursed non-entertainment-related 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. 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 non-entertainment-related business meals is generally subject to a 50% limitation. You generally can’t deduct meal expenses unless you (or your employee) are present at the furnishing of the food or beverages and such expense is not lavish or extravagant under the circumstances.
• For more information on a temporary 100% deduction for food or beverages provided by a restaurant paid or incurred after December 31, 2020, and before January 1, 2023, refer to Notice 2021-25PDF. For more information on a special rule that allows the temporary 100% deduction for the full meal portion of a per diem rate or allowance, refer to Notice 2021-63PDF.

Additional Information

Publication 463, Travel, Entertainment, Gift, and Car Expenses

Tax Topic 511 - Business Travel Expenses

Notice 2021-25, Temporary 100-Percent Deduction for Business Meal Expenses

Notice 2021-63, Temporary 100-Percent Deduction Applies to Meal Portion of 2021 and 2022 Per Diem Ra...

[evelynm]

Hello Taylor:

Tax laws are evolving - to claim 100% you must meet the following:

• Office parties and outings held for the benefit of its employees (other than highly-compensated employees)
• Meals and entertainment provided to employees as compensation and reported as taxable wages
• Meals provided by a restaurant

Here are further details:   https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-credits-deductions/types-meal-entert...