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The IRS Publishes Per Diem Rates

The IRS Publishes Per Diem Rates

The annual notice of per diem tax rates has been released by the IRS. This notice applies to per diem business expenses that are paid to any employee on or after October 1, 2012. Listed below are the new yearly rates that apply to four categories. As reported on gsa.gov the categories are as follows:

  • The lodging allowance
  • The meals allowance
  • The incidental expense allowance

CONUS v. NSA

Allowable per diem deductible rates apply to CONUS or the contiguous United States, 48 U.S. states on the continent of North America. Approximately 2600 counties are covered by the standard CONUS per diem rate which is $129 total. This includes $83 for hotel and $46 meals and incidentals. Incidentals can be hotel parking or laundry valet—anything related to the stay that is NOT room and meals.

Certain counties are considered NSA localities or Non Standard Areas. What this means essentially is that based on averages these areas are much more expensive. Therefore, the total allowable per diem amounts for NSA localities is more. For the fiscal year 2014, it is important to note that there are 400 Non-Standard Areas (NSAs) in which the per diem rates allowed are higher than the standard allowed rate. Additionally, according to GSA, there are several areas that were once classified as NSA that have now been down-graded to the CONUS group this year (approximately 29). Several have also been up-graded from CONUS to NSA. See this link.  

Meal and Incidentals

Gsa.gov published a very helpful chart to illustrate the allowed meal and incidental rates:

M&IE Total

$46

$51

$56

$61

$66

$71

Continental Breakfast/ Breakfast

$7

$8

$9

$10

$11

$12

Lunch

$11

$12

$13

$15

$16

$18

Dinner

$23

$26

$29

$31

$34

$36

Incidentals

$5

$5

$5

$5

$5

$5

First & Last Day of Travel

$34.50

$38.25

$42

$45.75

$49.50

$53.25

Rules for Meals and Lodging

According to IRS.gov, there are applicable rules for per diem as to price range, safe properties and ‘business week’ parameters. These guidelines must be followed in order for an employee to claim ‘business per diem expenses’.  An overview includes:

    • Only “fire safe” properties; GSA is required by law to use only properties that are certified as being in compliance with the Hotel & Motel Fire Safety Act of 1990.
    • Properties that fall within the mid-price range.
    • Data from the prior 12-month period. For FY 2014, this is from April 2012 through March 2013;
    • Business travel week data (Monday through Thursday)

A Tax Accountant to the Rescue…

If NSA v. CONUS or what falls into the incidental category in 2011 v. what now goes into the transportation category in 2014 is enough to make your head spin, it may be time to seek the help of a Certified Public Accountant. Contact Joel Lewinson at 818-593-6777 today to handle all of your business tax accounting needs. Let a dedicated accountant handle all of the tedious tax details, while you get back to doing what you do best!

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