The IRS has issued new per diem rates for taxpayers traveling on business to use in substantiating ordinary and necessary expenses and changes include additional locations.
The annual 2017-2018 rates pertain to the special transportation industry meal and incidental expenses (M&IE) rates, the rate for the incidental-expenses-only deduction, and the rates and list of high-cost localities.
The rates took effect Oct. 1 and conclude on Sept. 30, 2018.
Taxpayers who use the new rates and localities list in the latest notice must also comply with Revenue Proclamation 2011-47, which provides general rules for per-diem rates for lodging, meals and incidental costs incurred during business travel.
Here’s a snapshot of what’s covered:
- Incidental expenses. After Rev. Proc. 2011-47 was published, the General Services Administration published final regulations that revised how incidental expenses were defined under the Federal Travel Regulations. Thus, only fees and tips given to porters, baggage carriers, hotel staff, and staff on ships were included. Transportation between places of lodging or business and places where meals are eaten, and the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings, are no longer included. Taxpayers who use the per diem rates may separately deduct or be reimbursed for transportation and mailing expenses. The rate is $5 per day for travel within or outside of the continental U.S.
- Transportation industry. M&IE rates for taxpayers in the transportation industry are $63 for travel within the continental U.S. and $68 for travel outside the U.S.
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About Terry Sheridan
Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.