For business meals, should I enter the amount at 100% or at the 50% amount. If at 100% does Turbotax make the reduction?

[mesquitebean · Accepted solution]

You appear to be using online Self-Employed Edition, so I presume you are referring to the Business Expense section on meals.   TurboTax handles 2 types of deductible business meal situations.

Meals deductible at 50% (such as business travel, or seminars, etc.)

or Meals deductible at 100%  (some less-common things such as :

• Meal expenses for a company picnic or holiday party
• Food made available to the public for free
• Reimbursed expenses to employees and contractors that is included on the W-2 or Form 1099 as taxable compensation
• Meal expenses that are sold to a client or customer, like providing meals as part of a daycare service

If you're referring to the usual case of 50%-deductible business meals, TurboTax will calculate the amount that is allowed.  You enter the actual total amount, and let TurboTax do the math.

When you go through the Business Expense section, you should get to this screen and the explanation which I've pasted here:

        " Let's enter the meals expenses for [your business]"

"Most work-related meals expenses are 50% deductible. Enter the total amount you spent, and we'll do the math for you when we have all your expenses.

FYI: Entertainment expenses used to also apply to this category, but they are no longer deductible.  (click Learn More link for more info.)

Some examples of deductible work-related meals include:

• Meals during business travel
• Meals while conducting business
• Meals at a seminar or conference
• Office snacks
• Other meals expenses

[TuckerdogAVL]

Where is this if you have gone past the “questions” and started entering individually. How do you get back to this?

[mesquitebean]

I'm not sure what you mean by  "past the questions and entering individually."  But assuming you are preparing a Schedule C for a self-employed business,  I can tell you how to get back to the Business Income and Expenses interview.    Are you using Online Self-Employed Edition or are you using the desktop software (CD/download)?

[mesquitebean]

Oops, I mistyped "Schedule  B" above and meant Schedule C.  I saw it right away, but you may have been emailed the comment, so sorry for that typo.  I've corrected it now.

[TuckerdogAVL]

What I mean is that I cannot see the “let’s enter the meal expenses for  your business” anymore. I’m suing the CD version and I can see “Enter Meal Expenses” and I know they would be 50% … but I see just ‘travel’ related and not client/business/vendor relations related.

[mesquitebean]

Which CD version--Home and Business is different from the others.

[mesquitebean]

In the Business Expense section, and subtopic "other common expenses," when you click "Meals" even though it says traveling, the next screen has the 50% and 100% choices, and has a example of each.  When you click on 50% or 100%, it has even more examples.

If you need a list of navigation steps to get to that section, let me know as well as which of the CD editions you are using,  but it sounds like you already know how to get there but didn't click on Meals and proceed.

By the way, the answer in this thread is for the threadowner who is using Online Self-Employed Edition.  The screens in the CD version may be titled differently.

[mesquitebean]

Are your meals 50% category?  If so, when you choose 50%, then on the next screen, in addition to listing a few examples, click on the blue link "see more examples", and there is an extensive list,  including non-travel examples.

If your meals are 100% category, then when you choose 100%, click the blue link that says "Learn more" for a list of examples.

[tuckerdognc]

Hi. Sorry I disappeared. I think the TT "reviewers" decided my typo for "using" was some sort of violation. I created two things in the category: Meals with clients and Meals while traveling. Hope that will work.

[mesquitebean]

50% meals for travel or for hosting business customers/clients are in the same category when using Interview Mode to prepare the return.  By "created two things" do you mean you manually entered descriptions in the Schedule C Worksheet or in the TurboTax Interview?  Are you using Forms Mode instead of the interview mode?    In either case, anything listed in the 50% section still gets added together and reported to the same line on the actual Schedule C.   Descriptions you enter in the Interview or on the Schedule C Worksheet are for your records, so you'll know how you split them up if every questioned about them.   Only the total amount from each category flows to Schedule C.

You can go into Forms Mode and look at the actual Schedule C to see how everything flowed and if it's showing up correctly.  There is also a Schedule C Worksheet.   Answers you provide in the Interview Mode actually flow first to Schedule C Worksheet.  Then from that Worksheet to the Schedule C.

[TuckerdogAVL]

Thanks. I was just keeping track for my own purposes. They are all 50%.

[evankstone]

I'm a little confused at this point. Should I be entering every meal into each line in the TurboTax interview screen for "Enter Meal Expenses"?

I can do that pretty easily for 2018 because I only have a handful, but I didn't know if it was correct to do it that way, or if the IRS prefers them summarized, like putting 5 client lunches as "Client Lunches" and 2 Team Lunches as "Team Lunches", instead of entering every lunch expense.

Like I said, I'm happy to do it either way but it could get cumbersome to enter for next year... Just wondering which way the IRS wants it (also there's the issue of receipts for meals over $75, which might be requested if 5 client lunches were bundled together).

For now, I'll list them out, but would appreciate knowing what the IRS really would ideally like to have for this, since it's not really clear from the instructions.

Thanks!

[mesquitebean]

evankstone
Ultimately, the only thing that goes to the IRS is the total of your deductible meal expenses, which will display on Line 24b of your Schedule C.   Any detailing and labels you enter on that meals screen show up on the Schedule C Worksheet, which is just for your records.  It's the total that goes to the IRS.  If they ever want more info on it, they'll ask for it.

You don't have to list each meal if you have other records to go by in case you are ever questioned.   If you list them in that interview, the list is not sent to the IRS, but will be on the Worksheet for your records.

If these are 50% meals, do not do the math yourself.   TurboTax automatically applies the 50% allowance to whatever you enter on that 50% meals screen.

Later before filing make sure everything shows up correctly on Schedule C.  If you have the desktop version (CD/download), you can view the Schedule C and Schedule C Worksheet anytime in Forms Mode.

[evankstone]

Thanks, @epo39b - this helps immensely, and clarifies very well the question I had.

It makes perfect sense, too — adding a bunch of detail would only creates a lot of noise. They just want the total, and the line items we see in TurboTax are basically just like a scratchpad or worksheet for our own personal reference -- it's just the rolled-up total that goes to the IRS. Good to know.

The feature of being able to flip back and forth between the form and the interview/quick-enter mode is very nice... I've used it before (but not very often), so that's a great idea to check it out in this case and see how it renders the form.

I've been a TurboTax user for years, but this is the first year where I've had to use it for serious tax preparation now that I'm self-employed, so the extra help in clarifying these semi-confusing matters is super helpful. Thanks again!