As Self-Employed individuals, members of the clergy are allowed to deduct some out-of-pocket ministry expenses on Schedule C or Schedule SE. One expense that many forget to track is the meal expense. If you are meeting others for church-related discussions or activities, you can deduct 50% of the meal costs on your return.
If you decide to deduct meals, it is important to maintain good documentation. IRS can disallow your meal deductions if you don’t have any proof to substantiate your expense.
Here are some quick tips for documenting your meal expenses:
- Save the receipt.
- Write notes directly on the receipt. Make sure to document the amount of the expense, the time and place of the meeting, the meeting purpose, and the relationship of the people present.
- Many receipts are printed on paper that can fade over time. Consider scanning the receipts into a computer and saving them on a flash drive.
- Taxes or tips can be included in the deduction.
- In order to be deductible, meals cannot be lavish or extravagant (according to IRS, “reasonable based on the facts and circumstances”).
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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