In 2013, I performed services as a contractor for a client and was reimbursed 100% for all travel, meals, and supplies. Box 7 on a 1099-MISC has included all reimbursed expenses for travel, meals, and supplies (in addition to wages/fees).

I'm confused as to whether the meals are deducted at the 50% rate or in its entirety. For example, if I spent $1000 on meals and was reimbursed $1000, am I able to only deduct 50% of it (i.e., $500)?

I did furnish information about the meals (amount, date, etc. in order to get reimbursed) but did not provide receipts to the client (and by now, a good number of the receipts for meals are likely not available).

Thanks in advance!

#1; Your ER decided he did not want the burden of an accountable plan (under the plan he can deduct only 50% of his reimbursement),nor did he want to take the tax hit for the other 50% of the meals, so he passed the expenses on as income to you on 1099 box 7(so that he can deduct 100% of the exp on his Sch C). You in turn need to deduct the expenses, up to the limits onyour Sch C, and have the burden of keeping the receipts for audit purposes for the next 7 years.

#2;correct; Meals are only deductible at 50% on Sch C of 1040 line 24b. In most cases, you can deduct only 50% of your business meal and entertainment expenses, including meals incurred while away from home on business. However, for individuals subject to the Department of Transportation hours of service limits, that percentage is increased to 80% for biz meals consumed during, or incident to, any period of duty for which those limits are in effect.

#3; Keeping accurate expense records for taxes can help you breeze through an audit. However, don't be reluctant to take off certain expenses if you find you have no receipt. The IRS does not require receipts for some deductions if the amount is within a specific range. You may be missing important deductions that lower your tax liability. the IRS understands that everyone must eat. If you didn't keep receipts for out of town meals, there's a standard meal and incidental daily expense rate. You simply need to look up the rate for the area you spent the night, at the US General Services Administration website. But you still have to prove you spent the night and the trip was a legitimate biz related exp to reap the benefits of the deduction on Sch C