The IRS logic is whether you’re at home or away on business, you still must eat. Your meals at home aren’t deductible, so the IRS doesn't allow
you to deduct 100% of your meal expenses when traveling. Instead, you are allowed to deduct just 50% of your meal expenses while on a business trip. There are two ways to
calculate your meal expense deduction: You can keep track of your actual
expenses or use a daily rate set by the federal government.
If you use the actual expense method, you must keep track of what you spend
on meals (including tips and tax) en route to and at your business destination.
When you do your taxes, you add these amounts together and deduct half of the
total.
Instead of deducting your actual expenses, you can
deduct a set amount for each day of your business trip. This amount is called
the standard meal allowance. It covers your expenses for business meals,
beverages, tax, and tips. The amount of the allowance varies depending on where
and when you travel.You can find the current rates for travel within the
United States on the Internet at www.gsa.gov (look for the link to “Per Diem
Rates”). You can also find it in IRS Publication 1542. You do not have to keep up with your receipts if using this method.
When you look at these rate listings, you’ll see several categories of numbers.
You want the “M & IE Rate”—short for meals and incidental expenses. Rates
are also provided for lodging, but these don’t apply to nongovernmental
travelers.
You must use the same method for the entire year. You can't pick and choose which method to use trip by trip.
