Meal Tax Deduction Clarification

[Shane Moss]

I'm trying to make sense of what I'm reading about deducting meals. It looks like I have to be on a business trip in order to take the deduction. Is that right? Here's my scenario:

I'm getting ready to take possesion of a property in a couple of days. It is only about 15 miles from where I live. I plan on being over there almost every day this summer. Can I take meal deductions when I eat out even though I'm not that far from home?

Secondly, can I also deduct a meal that I buy for a family member who is helping, but not an employee?

[Account Closed]

I will assume that you have created a business that invests in real estate. It sounds like you are mixing up some of the rules.

Normally meals where you eat out on your own are not deductible business expenses. If you are traveling these meals can be deductible but the situation you are describing would not be considered traveling.

Other rules apply when you are meeting potential business contacts and discussing business. These meals maybe deductible as meals & entertainment expenses. The expense must be ordinary and necessary.

You are also allowed to fully deduct the cost of meals in situation where the employer has employees and needs to have them continue on a job and so for the convenience of the employer provides a meal that allows the employees to remain on the job.

The IRS recognizes that there has been a lot of abuse when deducting meals and many years ago limited most meal deductions to 50% of the cost of meals and entertainment.

Hopefully this helps. There is some gray in the rules, you'll want to document the business purpose of any meal deductions that you take. If they are costs of travel you will want to document the business purpose of the travel and how much time was spent on business related activities during the trip.