Question

Professor Slither attended the Antarctic Economic Association meetings. She is able to deduct fully from her taxes the hotel expenses that she incurred, but can deduct only half of the meals expenses that she incurred.

Why does the U.S. tax code make this distinction?

Answer 1

The U.S. tax code allows for the full deduction of hotel expenses but only a partial deduction of meal expenses to balance legitimate business deductions and prevent potential abuse.

Step-by-step explanation:

The U.S. tax code makes a distinction between the deductibility of hotel expenses and meal expenses for individuals attending business meetings like the Antarctic Economic Association meetings that Professor Slither attended.

While hotel expenses are fully deductible, the deductibility of meal expenses is typically limited to 50%. One reason for this is to prevent excessive deductions for what could be considered personal expenditures, since meals might also be enjoyed for personal pleasure aside from the business requirement.

The tax code's rules aim to balance between allowing legitimate business expense deductions while limiting the potential for abuse.