Wednesday, October 22, 2008

You must get receipts for meals.

June --

When traveling for work meals are deductible at 50% for the location and time period in question without showing receipts.

If I do photography for an organization at a place where meals and lodging are included, can one still take the meal deduction? Or does the rule, "You can't deduct what you did not pay for" hold?

And
what if the meals and lodging -- and perhaps travel -- are in lieu of monetary payment?

Thank you.

Miriam
New York


Hello Miriam,

All deductible business meals -- whether while traveling or not -- are deductible at 50%. However, I think you picked up some misleading info somewhere. You must have a receipt for all business meals and entertainment.

You do not need receipts for meals while traveling if you choose to use the per diem method of deduction.

If meals are included you may not deduct the cost of meals.

If you receive meals and lodging or travel in lieu of payment, then the value of the meals, lodging and travel is income to you. You may then deduct your expenses from that income.

Best,
June

4 comments:

DXN said...

Is a credit card bill sufficient for a receipt?

PS: Love the blog and your advice!

June Walker said...

Hi dxn,

For a meal and/or entertainment expense a credit card receipt is not sufficient.

You must have all the following information:

-- Name & business relationship of the person with whom you dined or partied
-- Business purpose of the meal or entertainment
-- Amount of meal or event
-- Date of meal or event
-- Name of the restaurant or event
-- Type of entertainment if not obvious

And, although you may use a per diem amount when traveling, for all other meals and entertainment you must have receipts. No estimating allowed.

June

PS: So glad you "love" my stuff.

Anonymous said...

If you hire a sub contractor to do a job and part of the contract with them is to provide meals, is that deductible? Or would that go on said sub contractor's 1099-MISC as part of his/her wages?

June Walker said...

Dear Anonymous,

I think you are mixing up employees and self-employeds.

A sub-contractor does not receive wages. Only employees receive wages.

When you say provide meals I am going to assume you are providing the actual meals not money to purchase meals.

You may deduct the cost of the meals only if they fit the regular criteria for meals deduction.

Check out my posts on meals and entertainment expenses to see if the meals you provide fit the regs.

-- June