Dictionary of Accounting Terms: meal expense deduction
meal expense deduction
income tax allowance for business meals. It is limited to 50% of the amount on the individual's tax return. Food and beverages are not deductible unless the taxpayer (1) shows the item directly applied to the active conduct of the taxpayer's trade or business and (2) sufficient substantiation exists. No deduction is permitted unless business is discussed during, just before, or just after the meal. Further, the meal cannot be extravagant as defined by the IRS.
