Self employed ind. contractor. Received $59/day perdiem for meals, included in income Box 7 on 1099-Misc. Does the 50% ded for meals on Sch C line 24 apply to perdiem?

[mmrh1120]

Confused about the 50% meals deduction on Sch. C Line 24b as it pertains to daily per diem amount.  It is added as income to Box 7 on non-employee compensation and I think I should be able to deduct the full amount received as per diem?

[MinhT · Accepted solution]

Unfortunately, you can only deduct 50% of your meals when traveling on business even if your client reimbursed you on a per-diem and included the amount on your 1099-MISC.

The only way not to have a tax "hit" on your meal expenses is when you are reimbursed on an accountable plan (where the employer or client reimburses you the exact amount of your meals on presentation of supporting documents).

[mmrh1120]

Thank you for responding.

[drdively]

So, just to clarify, a 1099 fee basis contractor [paid flat fee per visit completed] who receives a flat per diem reimbursement [with no provision for submitting expense receipts to the contractor]  will see the per diem total amount paid broken out on the 1099 in a separate box.  And that amount can only be offset as taxable income by deductions on Schedule C.

If so, I am glad I upgraded to Turbo Tax Home and Business, as this is the first year BACK in to a 1099 scenario in a bigger way.