Contractors are individuals who work independently in a specific trade or profession. Being self-employed means that contractors have to take care of their expenses themselves, including their food expenses when they are working on a job. In this article, we will discuss whether contractors are eligible to claim food expenses as a business expense.
The Internal Revenue Service (IRS) allows self-employed individuals to claim various business expenses as tax deductions. However, food expenses are subject to specific rules and conditions that must be met before they can be claimed.
Firstly, the food expense must be incurred while traveling for business purposes. This means that contractors must be away from their usual workplace to claim food expenses. For example, a contractor traveling to a job site that is not near their home office can claim food expenses for the duration of the trip.
Secondly, the food expense must be reasonable. The IRS defines reasonable as usual and necessary for the trade or profession of the taxpayer. This means that contractors cannot claim extravagant meals or lavish dining experiences. Instead, they can only claim for meals that are common for their profession.
Thirdly, contractors cannot claim food expenses for meals that are considered personal. For example, if a contractor takes a break to have lunch while working on a job site, they cannot claim that lunch as a business expense. However, if the contractor had lunch with a client or colleague to discuss business matters, that lunch would be considered a business expense.
Lastly, contractors must keep accurate records of their food expenses, including receipts, to claim them as a deduction. Contractors should also keep a log of their business trips, including the dates, locations, and purpose of the trip.
In conclusion, contractors can claim food expenses as a business expense if they meet the conditions set out by the IRS. Contractors must be traveling for business purposes, the food expense must be reasonable for their profession, the meal cannot be personal, and accurate records must be kept. By following these guidelines, contractors can claim food expenses as a tax deduction and reduce their taxable income.