Page 197 - Individual Forms & Instructions Guide

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Do not include entertainment expen- high cost locales, see IRS.gov/irb/ For example, if you had a second line,
ses on this line. 2021-52_IRB#NOT-2021-52. you can deduct the business percentage
Business meal expenses. You can de- Amount of deduction. Business meals of the charges for that line, including the
duct all or a percentage of the actual cost are 100% deductible if the meals are base rate charges.
of a meal if the following conditions are food or beverages provided by a restau-
met. rant and paid or incurred after December Line 26
• The meal expense was an ordinary 31, 2020, and before January 1, 2023. In Enter the total salaries and wages for the
and necessary expense in carrying on most cases, for other business meals, tax year reduced by the amount of the
your trade or business. you can deduct only 50% of your busi- following credit(s), if applicable.
• The expense was not lavish or ex- ness meal expenses, including meals in- • Work Opportunity Credit (Form
travagant under the circumstances. curred while away from home on busi- 5884).
• You or your employee was present ness. However, for individuals subject to • Employee Retention Credit for
at the meal. the Department of Transportation (DOT) Employers Affected by Qualified Disas-
• The meal was provided to a cur- hours of service limits, the percentage ters (Form 5884-A).
rent or potential business customer, cli- for other business meals is increased • Empowerment Zone Employment
ent, consultant, or similar business con- from 50% to 80% for business meals Credit (Form 8844).
tact. consumed during, or incident to, any pe- • Indian Employment Credit (Form
• In the case of food or beverages riod of duty for which those limits are in 8845).
provided during or at an entertainment effect. Individuals subject to the DOT • Credit for Employer Differential
event, the food and beverages were pur- hours of service limits include the fol- Wage Payments (Form 8932).
chased separately from the entertain- lowing. • Employer Credit for Paid Family
ment, or the cost of the food and bever- • Certain air transportation workers and Medical Leave (Form 8994).
ages was stated separately from the cost (such as pilots, crew, dispatchers, me-
of the entertainment on one or more chanics, and control tower operators) Do not reduce your deduction for any
bills, invoices, or receipts. who are under Federal Aviation Admin- portion of a credit that was passed
istration regulations. through to you from a pass-through enti-
You cannot avoid the entertain-
• Interstate truck operators who are
! ment disallowance rule by in- under DOT regulations. ty. See the instructions for the credit
CAUTION flating the amount charged for form for more information.
food and beverages. • Certain merchant mariners who are
under Coast Guard regulations. Do not include salaries and wages de-
See Notice 2021-25 for examples and However, you can fully deduct meals ducted elsewhere on your return or
more information. Notice 2021-25 is and incidentals furnished or reimbursed amounts paid to yourself.
available at IRS.gov/irb/ to an employee if you properly treat the If you provided taxable fringe
2021-17_IRB#NOT-2021-17. expense as wages subject to withhold- ! benefits to your employees,
Standard meal allowance. Instead of ing. You can also fully deduct meals and CAUTION such as personal use of a car,
deducting the actual cost of your meals incidentals provided to a nonemployee do not deduct as wages the amount ap-
while traveling away from home, you to the extent the expenses are includible plicable to depreciation and other ex-
can use the standard meal allowance for in the gross income of that person and penses claimed elsewhere.
your daily meals and incidental expen- reported on Form 1099-NEC. See Pub.
ses. Under this method, you deduct a 535 for details and other exceptions. In most cases, you are required to file
specified amount, depending on where Daycare providers. If you qualify as a Form W-2 for each employee. See the
you travel, instead of keeping records of family daycare provider, you can use the General Instructions for Forms W-2 and
your actual meal expenses. However, standard meal and snack rates, instead of W-3.
you must still keep records to prove the actual costs, to figure the deductible cost
time, place, and business purpose of of meals and snacks provided to eligible Line 30
your travel. children. See Pub. 587 for details, in-
The standard meal allowance is the cluding recordkeeping requirements. Business use of your home. You may
federal meals and incidental expenses be able to deduct certain expenses for
(M&IE) rate. You can find these rates Line 25 business use of your home, subject to
for locations inside and outside the con- Deduct utility expenses only for your limitations. To claim a deduction for
tinental United States by going to the trade or business. business use of your home, you can use
General Services Administration's web- Form 8829 or you can elect to determine
site at GSA.gov/travel/plan-book/per- Local telephone service. If you used the amount of the deduction using a sim-
diem-rates/mie-breakdown. your home phone for business, do not plified method.
See chapter 2 of Pub. 463 for details deduct the base rate (including taxes) of If you have a business use of another
the first phone line into your residence.
on how to figure your deduction using But you can deduct any additional costs home, you can’t use the simplified
the standard meal allowance, including you incurred for business that are more method for that home. You can use the
special rules for partial days of travel. than the base rate of the first phone line. Form 8829 to claim expenses for busi-
For special per diem rates and rules of ness use of the other home.

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