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Category: General Questions

Can I Deduct 50% or 80% of my Meals and Entertainment Expenses on my Schedule C?

The allowable amount of meal and entertainment expenses you are allowed to deduct on your Schedule C, whether it is 50% or 80%, is determined by the line of work you are in.

For most taxpayers, the IRS allows you to only deduct 50% of your business meals and entertainment expenses, including meals incurred while away from your home on business. However, if you are subject to the Department of Transportation (DOT) hours of service limits, the allowable deductible percentage is increased to 80% for business meals consumed, or related to, any period of duty for which those limits are in effect.

Taxpayers subject to the Department of Transportation hours of service limits include the following:

  • Certain air transportation workers (i.e. pilots, crew, dispatchers, mechanics, and control tower operators) who are under Federal Aviation Administration regulations.
  • Interstate truck drivers who are under DOT regulations, and
  • Certain merchant mariners who are under Coast Guard regulations.

Note: Business meal expenses are deductible only if they are;

  1. Directly related to or associated with the active conduct of your trade or business.
  2. Not lavish or extravagant, and
  3. Incurred while you or your employee is present at the meal.

Within the TaxSlayer program, you will report 100% of the meal and entertainment expenses incurred by entering the full amount of your expenses in the box noted for 50% or 80% reimbursement and our program will automatically calculate the allowable deductible percentage based on the entries.

This information will be reported within the "Expenses" section of your Schedule C. From the My Account screen, select Federal Section>>>Enter Myself>>>Profit or Loss From a Business>>>General Expenses.