With the increased cost-of-living we have seen over the past few years, accompanied with a higher-than-normal level of inflation, it is not surprising that we taxpayers seek to find as many possible tax deductions as we can. But the answer to this question depends on the circumstances.
Groceries you buy for your household are a personal expense and are not deductible. The same thing applies to food that you buy for yourself when you are working from home. But there are numerous cases in which food purchases can be deductible, either in part or in full.
Let us begin with how things work if you are an employee in certain occupations. Your daily meal expenses are generally not deductible, regardless of whether you work from home or at your employer’s location. However, the situation changes if you are sent on a business trip that includes an overnight stay or is long enough that you need to stop for substantial sleep or rest to properly perform your duties. In cases such as this, generally 50% of your out-of-pocket meal expenses may be deductible – provided that they are not lavish or extravagant under the circumstances. The amount of expenses for the deduction of meal expenses includes delivery fees, taxes and tips relating to the meal. You can calculate your travel meal expenses using either of the following methods:
- Actual cost. In this method, you must keep accurate records of your costs. Your deduction is based on the amounts that were not reimbursed by your employer. From tax years 2018 through 2025, only taxpayers in the following categories can claim these unreimbursed employee expenses:
- Armed Forces reservists.
- Qualified performing artists.
- Fee-based state or local government officials.
- Employees with impairment-related work expenses.
- Standard meal allowance. The amount you can claim under this method is based on the meals and incidental expense (M&IE) portion of the federal per diem rate for the location of your travel. This method allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. However, if you use the standard meal allowance, you must still keep records to prove the time, place, and business purpose of your travel. The applicable M&IE rate for destinations throughout the US can be found on the website of the General Services Administration. For travel in 2023, the rate for most small localities in the United States is $59 per day. Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances e.g., the M&IE rate for Dallas, TX is $69. You can generally deduct only 50% of the standard meal allowance for your location of travel.
Workers who are subject to the U.S. Department of Transportation “hours of service” rules can use a deduction of 80% for meals (compared to the general 50% limitation). This can include individuals working on an airline, barge, bus, ship, train, or truck. In addition to this higher limit for deducting meals, transportation workers also have their own special standard meals and incidental expenses (M&IE) rate of $69 per day.
Taxpayers who are self-employed can use the standard meal allowance method while traveling, rather than keeping actual receipts. But they must still keep records to prove the time, place, and business purpose of their travel. And they can generally deduct only 50% of the standard meal allowance for their location of travel.
Although we have focused our discussion on individual taxpayers in this article, the matter of the deductibility of business meals is discussed in more detail in this
earlier article. Further information can be found in IRS Publication 463
Travel, Gift, and Car Expenses, which is found on the
IRS website.