Per Diem

Internal Revenue Service increases Per Diem Allowance....

The per diem information is from: Rev. Proc. 2009-47    Download New GSA Rates

A taxpayer may treat $59 as the federal M&IE rate for any CONUS (Continental United States) locality of travel, and $65 as the federal M&IE rate for any OCONUS (Outside Continental United States) locality of travel. A employee or self-employed individual that uses either of these special rates must use the special rate(s) for all amounts deemed substantiated for travel away from home within CONUS and/or OCONUS, as the case may be, during the calendar year. You may either use the standard rates or the GSA Rates. Please contact us with questions regarding your particular situation.

Internal Revenue Code allows a deduction for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business. Under that provision, an employee or self-employed individual may deduct expenses paid or incurred while traveling away from home in pursuit of a trade or business. Amounts are deemed substantiated provided the employee or self-employed individual substantiates the elements of time, place, and business purpose of the travel for that day.

Any expense for food, beverages, or entertainment is limited to 50 percent of the amount of the expense that otherwise would be allowable as a deduction. In the case of any expenses for food or beverages consumed while away from home by an individual during, or incident to, the period of duty subject to the hours of service limitations of the Department of Transportation, provides that, for taxable years beginning in 2009 or thereafter, the deductible percentage for these expenses is 80 percent.

This revenue procedure is effective for per diem allowances for lodging, meal and incidental expenses, or for meal and incidental expenses only that are paid to an employee on or after October 1, 2009

Berman Cook is providing the information on this web site for general guidance only. This general information is provided to represent a good faith effort to provide accurate and complete tax information.   The information provided herein should not be used as a substitute for consultation with professional advisers. Every situation may be unique, please contact us to discuss your particular situation.