It's my understanding that meals are 50% deductible on a business trip. Given that, I have two questions:

1) Does this include groceries if you choose to eat in your hotel room?

2) When does a business trip become "living out of town"? For example, I spent a year in Chicago on a work contract and maintained my residence in Dallas. If I flew to Chicago on a Sunday and came back on Friday, then I think it's clear that meals would be 50% deductible. What if I stayed two weeks, or four weeks, or even eight weeks, between trips home? Does that make it less of a "business trip"? (The purpose for being there is to earn money working as software contractor.) What if I had an apartment there? Does the length of stay, or renting an apartment disqualify it from a business trip?

  • Are you a contractor with 1099 income, or are you a w-2 employee who works for a company that has a contract in Chicago? – mhoran_psprep Dec 3 '19 at 14:42
  • My Sub-S corp has the contract and gets the 1099, I then get W2 by my corp. – NealWalters Dec 3 '19 at 16:59

The IRS allows travel deductions for "temporary assignments" which it considers as job assignments outside of your tax home (i.e. not in the city or region where you normally work) which are expected to last for 1 year or less. So, for instance, if you normally work in New York but you will be traveling to Los Angeles for 6 months, that counts as a deductible trip. But if you will be traveling to Los Angeles for the next two years (even if you continue to have a residence in New York), it's not deductible.

Essentially, if your "long" business trip is less than a year, you can make the deductions. If it is longer than a year, then the IRS considers the location you've made the trip to as your main place of work, and the trip is not deductible.

The IRS Publication 463 covers this topic and includes many examples on how to determine if your trip is actually a trip or not (look under "Tax Home").

Meal costs are also well defined in that publication. Generally, you can deduct based on actual expenses (which would include groceries purchased for meals) or standard meal allowances for the area in which you are working.

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