Instructions For Schedule C 1040 - 2016 (Page 9 of 18) in pdf

would otherwise be deductible by that

Also, you cannot deduct membership

Certain air transportation workers

person.

dues for any club organized for busi-

(such as pilots, crew, dispatchers, me-

ness, pleasure, recreation, or other social

chanics, and control tower operators)

Do not include expenses for meals

purpose. This includes country clubs,

who are under Federal Aviation Admin-

and entertainment on this line. Instead,

golf and athletic clubs, airline and hotel

istration regulations.

see

Line

24b, later.

clubs, and clubs operated to provide

Interstate truck operators who are

meals under conditions favorable to

under DOT regulations.

Instead of keeping records of your

business discussion. But it does not in-

Certain merchant mariners who are

actual incidental expenses, you can use

clude civic or public service organiza-

under Coast Guard regulations.

an optional method for deducting inci-

tions, professional organizations (such

However, you can fully deduct meals,

dental expenses only if you did not pay

as bar and medical associations), busi-

incidentals, and entertainment furnished

or incur meal expenses on a day you

ness leagues, trade associations, cham-

or reimbursed to an employee if you

were traveling away from your tax

bers of commerce, boards of trade, and

properly treat the expense as wages sub-

home. The amount of the deduction is

real estate boards, unless a principal pur-

ject to withholding. You can also fully

$5 a day. Incidental expenses include

pose of the organization is to entertain,

deduct meals, incidentals, and entertain-

fees and tips given to porters, baggage

or provide entertainment facilities for,

ment provided to a nonemployee to the

carriers, bellhops, hotel maids, stewards

members or their guests.

extent the expenses are includible in the

or stewardesses and others on ships, and

There are exceptions to these rules as

gross income of that person and reported

hotel servants in foreign countries. They

well as other rules that apply to skybox

on Form 1099-MISC. See Pub. 535 for

do not include expenses for laundry,

rentals and tickets to entertainment

details and other exceptions.

cleaning and pressing of clothing, lodg-

events. See chapters 1 and 2 of Pub.

ing taxes, or the costs of telegrams or

Daycare providers. If you qualify as a

463.

telephone calls. You cannot use this

family daycare provider, you can use the

method on any day that you use the

Standard meal allowance. Instead of

standard meal and snack rates, instead of

deducting the actual cost of your meals

actual costs, to figure the deductible cost

standard meal allowance

(as explained

while traveling away from home, you

of meals and snacks provided to eligible

in Line 24b, later).

can use the standard meal allowance for

children. See Pub. 587 for details, in-

You cannot deduct expenses for at-

your daily meals and incidental expen-

cluding recordkeeping requirements.

tending a convention, seminar, or simi-

ses. Under this method, you deduct a

Line 25

lar meeting held outside the North

specified amount, depending on where

American area unless the meeting is di-

you travel, instead of keeping records of

Deduct utility expenses only for your

rectly related to your trade or business

your actual meal expenses. However,

trade or business.

and it is as reasonable for the meeting to

you must still keep records to prove the

be held outside the North American area

Local telephone service. If you used

time, place, and business purpose of

as within it. These rules apply to both

your home phone for business, do not

your travel.

employers and employees. Other rules

deduct the base rate (including taxes) of

The standard meal allowance is the

apply to luxury water travel.

the first phone line into your residence.

federal M&IE rate. You can find these

But you can deduct any additional costs

rates for locations inside and outside the

For details on travel expenses, see

you incurred for business that are more

continental United States by visiting the

chapter 1 of Pub. 463.

than the base rate of the first phone line.

General Services Administration's web-

For example, if you had a second line,

Line 24b

site at

you can deduct the business percentage

See chapter 1 of Pub. 463 for details

of the charges for that line, including the

Enter your total deductible business

on how to figure your deduction using

base rate charges.

meal and entertainment expenses. This

the standard meal allowance, including

includes expenses for meals while trav-

Line 26

special rules for partial days of travel.

eling away from home for business and

Amount of deduction. In most cases,

for meals that are business-related enter-

Enter the total salaries and wages for the

you can deduct only 50% of your busi-

tainment.

tax year. Do not include salaries and wa-

ness meal and entertainment expenses,

Deductible expenses. Business meal

ges deducted elsewhere on your return

including meals incurred while away

expenses are deductible only if they are

or amounts paid to yourself. Reduce

from home on business. However, for

(a) directly related to or associated with

your deduction by the amounts claimed

individuals subject to the Department of

the active conduct of your trade or busi-

on:

Transportation (DOT) hours of service

ness, (b) not lavish or extravagant, and

Form 5884, Work Opportunity

limits, that percentage is increased to

Credit, line 2;

80% for business meals consumed dur-

is present at the meal.

Form 8844, Empowerment Zone

ing, or incident to, any period of duty for

Employment Credit, line 2;

You cannot deduct any expense paid

which those limits are in effect. Individ-

Form 8845, Indian Employment

or incurred for a facility (such as a yacht

uals subject to the DOT hours of service

Credit, line 4; and

or hunting lodge) used for any activity

limits include the following.

Form 8932, Credit for Employer

usually

considered

entertainment,

Differential Wage Payments, line 2.

amusement, or recreation.

C-9

Instructions For Schedule C 1040 - 2016 Page 9

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