Can I expense meals if I work in NJ and live in NYC, I am an independent contractor, self employed, reporting income on 1099 misc form?

[MichaelMc · Accepted solution]

Maybe. The question of meals is a very broad one, depending on who you are feeding or dining with, where you are, and the purpose of the meal. A number of changes were made by the Tax Cuts and Jobs Act of 2017.

Your own daily meals, while you are working in the general area of your tax home, which for you would be the New York City - Northern New Jersey metro area, are personal expenses and not tax deductible.

Meals provided for the benefit of employees will be 50% deductible in 2018 – 2025 and nondeductible after that. Formerly, these were 100% deductible.

The deduction for entertaining business associates and clients has been repealed for tax years 2018 – 2025. Prior to that, businesses could deduct 50% of the face value of entertainment (like sports events, theater, or golf) and 100% of the ticket cost to qualified charitable events, if the purpose was business-related.

There was some earlier confusion as to whether or not business meals were also considered entertainment and therefore no longer deductible. To clarify, the IRS issued Notice 2018-76 which implies that business meals are not treated as entertainment (and are therefore 50% deductible, same as before) if all of the following requirements are met:

1. The expense is an ordinary and necessary expense paid or incurred during the table year in carrying on a business.
2. The expense is not lavish or extravagant under the circumstances.
3. The taxpayer, or an employee of the taxpayer, is present at the furnishing of the food and beverage.
4. The food and beverages are provided to a current or potential business customer, client, consultant, or similar business contact.
5. In the case of food and beverages proved during or at an entertainment activity, the food and beverages are purchased separately from the entertainment or the cost of the food and beverage is stated separately from the cost of the entertainment on one or more bills, invoices, or receipts.  The entertainment disallowance rule may not be circumvented through inflating the amount charged for food and beverage.