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Suppose an independent contractor (IC) has a principal place of business (location A) in which the IC provides a service to a client. However, with some regularity, the IC provides the service at the client's principal place of business (location B). The number of hours spent (per day at location B) is considerable, so the IC brings a home-made lunch to location B.

In the United States, can the "Actual Cost" of the home-made lunch be deducted from the independent contractor's taxable income?

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  • How far away is location B? Are we talking "in the suburbs" or "three hour drive"? How regular is this?
    – Joe
    Jul 27 '18 at 16:46
  • 15 minute drive, 1-2 days per week
    – CSSBurner
    Jul 27 '18 at 16:48
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The general principle is that expenses are not deductible if they would not have been incurred if not for activity directed towards receiving taxable income. You would have needed to eat regardless of whether you had visited the client's location, so that is not tax deductible. A partial exception is made for business trips, the thinking presumably being that business travelers tend to get their food from sources such as restaurants that are more expensive.

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Meals can be deductible when travelling, but that isn't intended to mean a short trip, and particularly not a regular occurrence such as 1-2 times per week.

Quickbooks does a good job of describing this:

In the eyes of the IRS, that means you’re outside or general area where your work is located. To qualify as a business trip, the period of time must be substantially longer than a day’s work and you need to rest or sleep while away. So unless it’s exceptionally long, a day trip doesn’t qualify.

If you're eating with others, it's possible you could treat the meal as a "client business meal". Those are still deductible under the new rules (at 50%); see this table from accounting firm CBIZ which explains the new 2018 rules; they do reduce or eliminate some of the deductions, such as "entertainment" related meals (meals with no business purpose).

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  • Great - thanks for your reply. I will be able to upvote once my rep is high enough
    – CSSBurner
    Jul 27 '18 at 17:01
  • But what if it is a business trip?
    – CSSBurner
    Jul 27 '18 at 17:11
  • On a true business trip it would be 50% deductible I believe.
    – Joe
    Jul 27 '18 at 17:17

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