Claiming the IRS Meal Allowance
If you're self-employed, you may claim 50% of your meals allowance on Schedule C.
If you're an employee, use Form 2106, Employee Business Expenses (or 2106-EZ to report your meal allowance along with your other business-related expenses and reimbursements. Only 50% of the meal allowance is deductible.
The 50% meal allowance is deducted on Schedule A as a miscellaneous itemized deduction. It's added to any other miscellaneous deductions you may have and is subject to the 2% of adjusted gross income (AGI) floor.
For example, if your AGI is $50,000, 2% x $50,000 is $1,000. If your total miscellaneous deductions are $1,100, only $100 is deductible.
Transportation Industry Workers
For 2013, 80% of meal costs are deductible for the following individuals subject to the Department of Transportation hours of service limits:
- Interstate Truck drivers
- Railroad operators, and
- Other transportation industry employees subject to the Department of Transportation hours of service limits.
Your lodging expense is your actual cost. There is a per diem allowance for employers to use to reimburse employees.
IRS Publication 1542 (CONUS M&IE Rates)
The CONUS M&IE rates are published in IRS Publication 1542. CONUS stands for "Continental United States). M&IE stands for "meals and incidental expenses".
Publication 1542 shows the CONUS M&IE rates in effect for the twelve months, October 1 through September 30 (the federal government's fiscal year). For example, the 2014 fiscal year runs October 1, 2013 through September 30, 2014. Fiscal year 2014 will run, October 1, 2014 through September 1, 2015.
If you'd prefer not to deal with keeping records of your meal costs while away from home on business trips, you can claim an IRS meal allowance via Publication 1542. You must have proof of your business trip. Keep a record of the time, place, and business purposes of the trip. As long as you have this proof, you may claim the allowance even if your actual costs are less than the allowance.
For travel to the lower 48 continental United States (CONUS) locations, the standard meal allowance (M&IE) rages from $46 to $71 for 2013. However, higher rates apply in major cities and other high-cost locations designated by the government. The basic and high-cost-area meal rats are determined by the federal government's General Services Administration (GSA). The IRS allows taxpayers to use the applicable rates in figuring their meal allowance deduction.
Incidental expenses (M&IE) include a limited number of incidentals, such as fees and tips for porters, baggage carriers, hotel maids, or room stewards.
In computing your meal allowance (M&IE) for 2012 business trips, you can apply the rates in effect for the fist nine months of the year to business trips in the last three months. You can use the first set of rates for the first nine months and the updated rates for the last three months.
Trips in the last three months:
For trips you took in the last three months of the calendar year (October, November, December), you have two options for applying the rates. Keep in mind, you must consistently use one of these options; you may not switch between options.
- Option1: Use the rates in effect for the first none months, or
- Option 2: Use the revised rates that took effect October 1