What meal expenses can I deduct and at what rate?

Deductible meal expenses include expenses for meals while traveling away from home for business. Your deductible business meal expenses are a percentage of your actual business meal expenses or the standard meal allowance.

Business meal expenses are deductible only if all of the following conditions are met:

• The meal expense was an ordinary and necessary expense in carrying on your trade or business.
• The expense was not lavish or extravagant under the circumstances.
• You or your employee was present at the meal.
• The meal was provided to a current or potential business customer, client, consultant, or similar business contact.
• In the case of food or beverages provided during or at an entertainment event, the food and beverages were purchased separately from the entertainment, or the cost of the food and beverages was stated separately from the cost of the entertainment on one or more bills, invoices, or receipts.

You can figure your meals expense using either the actual cost method or the standard meal allowance method. Both methods allow 50% of the cost of your meals to be deducted, depending on what kind of meals they are and what your occupation is.

How do I know which business meals limit applies?