Travel Meals: Are They 100% Deductible Under IRS Guidelines?

In 2021 and 2022, restaurant meals were 100% deductible. From 2023, travel meals are generally 50% deductible unless lavish. The IRS permits a 100% deduction for business trip meals and lodging if not extravagant. (26 U.S.C. § 274(k))

However, there are exceptions. During 2021 and 2022, meals provided by restaurants became 100% deductible under special pandemic relief measures. This temporary provision was meant to support the dining industry. The meals must be ordinary and necessary to the business and must not be lavish or extravagant.

Understanding these nuances can help businesses manage their travel expenses wisely. Proper documentation is essential. Receipts, the purpose of the meal, and the list of attendees are necessary to substantiate the deduction.

The IRS guidelines, though detailed, often leave room for interpretation.

These complex rules on travel meals naturally lead to questions about other business expenses. How do various deductions impact your overall tax strategy? Understanding these deductions might just save your business money, reduce tax liability, and optimize your financial planning.

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