As a consultant, I submitted meal expenses during
business travel to my client, which were reimbursed. However, the amounts of all my
business expenses: flights, hotels, meals, etc., all of which were reimbursed,
were included with my fees on the 1099-MISC.
I understand how to carve out the flights and hotel expenses. However, how do I classify meals as
deductions to avoid paying income taxes on these reimbursed expenses? TT seems to want to classify them as having a 50% limit.
The IRS has ruled that in the case whether a client reimburses a contractor his meal expense, only one party (either the client or the contractor) shall bear the 50% limit.
Who shall bear that 50% limit depends on whether you account for the meals (i.e. provide receipts or other justification) to your client. If you account for the meals, then the client bears the 50% limit. If you fail to account for the meals, then you bear the 50% limit.
Please read this article for more information:
http://www.bizfilings.com/toolkit/news/tax-info/meal-expenses-travel-deducting-50-percent-limit.aspx
To avoid the 50% limit in TurboTax, you list the expense under Meals and Entertainment: 100% Limit.
The IRS has ruled that in the case whether a client reimburses a contractor his meal expense, only one party (either the client or the contractor) shall bear the 50% limit.
Who shall bear that 50% limit depends on whether you account for the meals (i.e. provide receipts or other justification) to your client. If you account for the meals, then the client bears the 50% limit. If you fail to account for the meals, then you bear the 50% limit.
Please read this article for more information:
http://www.bizfilings.com/toolkit/news/tax-info/meal-expenses-travel-deducting-50-percent-limit.aspx
To avoid the 50% limit in TurboTax, you list the expense under Meals and Entertainment: 100% Limit.