For business travel, are there limits on the amounts deductible for meals?

Yes, there are limits on the amounts deductible for meals during business travel.

1. 50% Limitation: Generally, the deduction for meal expenses incurred during business travel is limited to 50% of the unreimbursed cost. This applies whether you use the actual cost method or the standard meal allowance method. The 50% limit is a consistent theme across various sources, including IRS Publication 463, § 274 of the Internal Revenue Code, and the 2023 Instructions for Schedule C.
2. Conditions for Deductibility: For meal expenses to be deductible, they must meet certain conditions:
   • The expense must be ordinary and necessary in carrying on your trade or business.
   • The expense must not be lavish or extravagant under the circumstances.
   • The taxpayer (or an employee of the taxpayer) must be present at the furnishing of the food or beverages.
   • The meal must be provided to a current or potential business customer, client, consultant, or similar business contact.
3. Special Rules for Entertainment: If meals are provided during or at an entertainment event, the cost of the food and beverages must be stated separately from the cost of the entertainment on one or more bills, invoices, or receipts. If not, the entire amount is considered a nondeductible entertainment expense.
4. Exceptions to the 50% Limitation: There are specific exceptions where the 50% limitation does not apply, such as:
   • Meals provided by a restaurant paid or incurred after December 31, 2020, and before January 1, 2023, which were temporarily 100% deductible.
   • Meals required by federal law to be provided to crew members of a commercial vessel.
   • Meals provided on an oil or gas platform or drilling rig.
5. Special Rule for Individuals Subject to Federal Hours of Service: For individuals subject to the hours of service limitations of the Department of Transportation, the deductible amount is increased to 80% of the meal expenses.

In summary, while meal expenses incurred during business travel are generally deductible, they are subject to a 50% limitation, with specific conditions and exceptions that may apply.

Sources:
§ 274. Disallowance of certain entertainment, etc., expenses
Notice 2021-25
T.D. 9925
Unentertaining Business Meals and Entertaining Employee Meetings
2023 Instructions for Schedule C (2023)
Publication 463 (2023)