Flo and Artis wife and husband)are itemizing their Schedule A expenses on their tax year 2016 return.Artis traveled to Japan for his employer,but was not reimbursed.His meal expenses totaled $500.How much can Artis deduct for meals before applying the 2% of AGI limitation?
A)$500.
B)$0.
C)$250.
D)$150.

Question

Quizplus · Accepted Answer

Business-related meal expenses are deductible as long as they are not lavish or extravagant and are directly related to or associated with the active conduct of trade or business. In this case, Artis traveled to Japan for his employer, and the meal expenses were incurred for business purposes. However, there is a 50% limit on the amount of business meal expenses that can be deducted.

Since Artis's meal expenses were not reimbursed by his employer, he can deduct the full amount of $500 subject to the 50% limit. Therefore, his deductible amount for meals is $250 ($500 x 50%). Before applying the 2% of AGI limitation on Schedule A, Artis can deduct $250 for his business meals.

Flo and Artis Wife and Husband)are Itemizing Their Schedule a Expenses