The taxpayer can deduct the cost of the meal as business meal expense if claiming the meal as a travel expense. True or False?
Understand the Problem
The question is asking whether a taxpayer can deduct the cost of a meal as a business meal expense if claiming the meal as a travel expense. This requires knowing the rules around deducting meal expenses related to business travel.
Answer
True, with limitations. Taxpayers can typically deduct 50% of the cost of the meal as a business expense if it's a travel expense and not lavish or extravagant.
The statement is true, with limitations. A taxpayer can deduct the cost of a meal as a business meal expense if claiming the meal as a travel expense. Generally, only 50% of the meal expense is deductible, and the expense must not be lavish or extravagant.
Answer for screen readers
The statement is true, with limitations. A taxpayer can deduct the cost of a meal as a business meal expense if claiming the meal as a travel expense. Generally, only 50% of the meal expense is deductible, and the expense must not be lavish or extravagant.
More Information
The business meal deduction was cut to 80% of the cost in 1986, then to 50% of the cost, effective Jan. 1, 1994.
Tips
Remember that the meal must be directly related to your business and not lavish or extravagant.
Sources
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