How to Calculate Meal Percentages

You are generally eligible to deduct 50 percent of your business-related meals.

If you are paying for business-related meals as entertainment, or if you are traveling and compelled to eat away from home, you are eligible in most cases to deduct 50 percent of the cost of your meals, provided that they are priced reasonably. In some circumstances, such as if you are self-employed or if you are a long-distance driver, you may be eligible to deduct the full cost of your business-related meals, though these conditions are limited.

Things You'll Need

• Calculator
• Receipts and/or log containing records of meals

Instructions

1. Work from your receipts or log to add up your total meal expenses that you intend to deduct for the year.

2. Determine whether you can deduct the full costs of the meals (for special cases only) or if you will deduct only 50 percent of the costs of the meals.

3. Divide your total costs by two if you are deducting 50 percent of your meal costs to get your final figure. If you are eligible to deduct the full amount of the meals, use that figure for your tax deduction.

Tips & Warnings

• You need to be able to provide receipts for expenses that exceed $25.

References

• Small Business Notes: 50% Limit

Resources

• Small Business Notes: Exceptions to the 50% Limit