What is the IRS treatment of per diem for meals?

What is the IRS treatment of per diem for meals?

• A. 60% meal expense; 40% deductible
• B. 20% meal expense; 80% deductible
• C. 40% meal expense; 50% deductible
• D. Not deductible

Answer: (C)

In travel and per diem rules, the IRS divides the daily allowance into portions, with meals not deductible in full. The meals portion is typically allocated as about 40% of the total per diem. Of that meals portion, only 50% is deductible as a business expense. So if the per diem is $100, about $40 goes to meals, and only half of that, $20, is deductible. That matches the choice that indicates a 40% meal expense and a 50% deductible. The other options don’t reflect this split—meals aren’t fully deductible, and the commonly cited percentages don’t align with the 40% meals allocation and 50% deduction of that portion.

In travel and per diem rules, the IRS divides the daily allowance into portions, with meals not deductible in full. The meals portion is typically allocated as about 40% of the total per diem. Of that meals portion, only 50% is deductible as a business expense. So if the per diem is $100, about $40 goes to meals, and only half of that, $20, is deductible. That matches the choice that indicates a 40% meal expense and a 50% deductible. The other options don’t reflect this split—meals aren’t fully deductible, and the commonly cited percentages don’t align with the 40% meals allocation and 50% deduction of that portion.