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Writing is Taxing

 

 

The Per Diem
Option

 

Travel expenses can really add up for an author. What’s more, keeping up with all of those pesky meal receipts can be daunting, especially for long or busy trips. If you’re like me, you may have returned from a business trip unable to find a receipt you tucked away somewhere, most likely the bar tab from a particularly fun conference.

The good news is that you have an easy option for your business meals while traveling. Tax law allows you to use a standard meal allowance in lieu of your actual expenses.

The standard meal allowance is known as the “Meals and Incidental Expense” rate, or “M&IE” rate, for short. An M&IE study is conducted every three to five years and rates are adjusted based on the restaurant pricing data compiled. Current M&IE rates range from $46 to $71 per day.

The standard rate includes all costs for food, beverages, tips, and taxes. Therefore, you are not entitled to a separate deduction for drinks, gratuities, or taxes.

The standard meal allowance rates can be found in various places online depending on the location of your travel. For travel within the continental U.S., you can find the per diem rates on the U.S. General Services Administration website at www.gsa.gov. For travel outside the continental U.S., the per diem rates can be found on the U.S. Department of Defense website at http://www.defensetravel.dod.mil/site/perdiemCalc.cfm or on the U.S. Department of State’s website at http://www.state.gov/travel/.

If you travel to more than one location in a given day, use the rate for the location where you spend the night or stop to rest.

If you do not find your travel location listed, check to see if there is a stated rate for the county in which the city or town is located, and use the county’s rate. You can visit the National Association of Counties’ website at www.naco.org to determine which county a destination is located in. If neither the city nor county are listed, the standard CONUS location rate applies to that location. The standard CONUS M&IE rate is currently $46 for meals.

What if your destination is outside the U.S., but it takes you a day or more to travel across the U.S. as you go to and from the foreign destination? The rules state that the foreign travel rates do not apply until your mode of travel has left its last scheduled stop within the U.S. The foreign rates would cease to apply once you have made your last scheduled stop in the foreign location.

There are a few caveats, of course.

Just as we are entitled to deduct only 50 percent of our actual meal costs, only 50 percent of the standard meal allowance is deductible. If you use the GSA’s M&IE rate to determine the cost of your meals, remember to claim only half of the rate as your deduction.

You cannot use the full M&IE allowance on your first and last days of travel. You have the option of using 75 percent of the M&IE rate on those days or using a consistent method that is in accordance with reasonable business practices. If you use the 75 percent option, your deduction would thus be 37.5 percent of the M&IE allowance (50 percent deductible amount multiplied by 75 percent of the M&IE rate).

If your travel does not require an overnight stay away from home but you are away from your usual workplace longer than 12 hours, you are entitled to treat 75 percent of the M&IE rate as your cost of meals.

If you attend a conference or meeting in which some meals are provided for you, you must reduce your standard meal allowance by the amount that applies to the meal provided. A breakdown of the M&IE allow    

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