Self employed - what meal expenses can I write off for my vendor business when traveling?

The meal expense rules can definitely be confusing! Here's a straightforward explanation: For your meals while traveling for business (like when you go to these conventions and fairs), you can deduct 50% of the cost - not 100%. This applies to restaurant meals, not groceries generally. However, there was a temporary change for 2021-2022 where business meals from restaurants were 100% deductible. That's gone now, and we're back to the 50% rule for 2023 and beyond. When you buy meals for your contractors, those are also subject to the same 50% limitation if they're considered business meals. If you're providing them as part of their compensation, different rules might apply. Keep good records! Document the business purpose, who attended, and save those receipts.

I struggled with this exact issue until I found a tool that completely cleared up my confusion. I use https://taxr.ai to analyze all my receipts and categorize my food expenses properly. It automatically distinguishes between 100% deductible business expenses and 50% deductible meals when I upload my receipts. I'm a food truck operator who travels to different events, and I was constantly mixing up what was deductible and what wasn't. The tool even flags grocery purchases vs. restaurant meals so I don't accidentally claim something I shouldn't.

I was really skeptical about using an AI tax tool like taxr.ai, but I decided to try it after continuing to mix up my deductions. Complete game changer for my mobile mechanic business! I uploaded 6 months of receipts and discovered I'd been incorrectly categorizing about 30% of my meal expenses. The tool showed me that when I buy coffee and snacks for clients while working on their vehicles, that's 100% deductible as client entertainment in my specific situation, not subject to the 50% limitation. I had no idea! My accountant estimated this will save me about $1,200 this year alone. Wish I'd found this sooner.

If you're still struggling with the IRS rules, I'd recommend actually talking to someone at the IRS directly. I know that sounds impossible with how hard it is to get through, but I used https://claimyr.com and got connected to an IRS agent in less than 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had a similar question about meal deductions for my landscaping business, and the agent clarified everything for me - way better than getting potentially wrong advice online. They confirmed that meals while traveling to job sites are 50% deductible, but employee appreciation meals can sometimes be 100% deductible depending on circumstances.

I'm eating my words here. After posting that skeptical comment, I was still desperate to get tax answers about my meal deductions, so I tried the Claimyr service anyway. I got connected to an IRS agent in about 22 minutes. The agent confirmed that as a self-employed vendor, my meals while traveling to conventions ARE 50% deductible, but only if I'm away from my "tax home" (basically where my business is primarily based). If the convention is in my local area, those same meals aren't deductible because I'm not "traveling" according to IRS definitions. This cleared up years of confusion for me. Apparently I've been doing it wrong on both ends - sometimes claiming things I shouldn't, and sometimes not claiming legitimate expenses.

Don't forget about per diem rates! If you travel frequently for your vending business, using the standard meal per diem rates can be WAY easier than keeping all those food receipts. You still only get to deduct 50% of the per diem amount, but it significantly reduces your record-keeping burden. The rates vary by location, and you can find the current rates on the GSA website. For 2023, most locations have a standard meal per diem of $59, but high-cost areas can be up to $79 or more per day.

What about when you take potential clients out to dinner? I do vending at trade shows and sometimes take potential booth renters out to discuss business. Is that still 50% or is it something else? Also, is there a limit to how much you can spend per person?