IRS updates per diem rates for lodging and meal expenses when travelling
The IRS recently issued new daily rates for business travelers to use for lodging, meals and incidental expenses, effective Oct. 1.
The updated rates affect the amount that taxpayers can use to substantiate expenses for lodging, meals, and incidental expenses when traveling away from home. The IRS notice also includes the special transportation industry rate, the rate for the incidental expenses only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method.
The IRS noted that the use of a per diem substantiation method isn’t mandatory. Taxpayers can substantiate the actual allowable expenses if they maintain adequate records or other sufficient evidence for proper substantiation.
The special meals and incidental expenses rates for taxpayers in the transportation industry are $66 for any locality in the continental United States and $71 for outside the continental U.S. The rate for the incidental expenses only deduction is $5 per day inside or outside the U.S. For the high-low substantiation method, the per diem rates are $297 for travel to any high-cost locality and $200 for travel to any other locality within the continental U.S. The amount of the $297 high rate and $200 low rate that’s treated as paid for meals is $71 for travel to any high-cost locality and $60 for travel to any other locality within the continental U.S. The per diem rates in lieu of the rates for the meal and incidental expenses only substantiation method are $71 for travel to any high-cost locality, and $60 for travel to any other locality within the continental U.S. High-cost localities have a federal per diem rate of $248 or more.
To learn more about the new per diem rates for business travelers, please contact a Dugan & Lopatka professional at (630) 665-4440 or firstname.lastname@example.org.