Simplified Per Diem Deductions Increased

By November 12, 2009 Businesses

For those who travel for their job, the solution to your shoebox full of receipts just got a little sweeter.  The IRS allows standard reimbursement amounts for travel, Per Diem, to simplify record keeping for businesses, and in 2009 these Per Diem deductions increased.

As of October 1, the IRS is increasing the amount businesses can reimburse their employees for lodging, meals and incidentals.  When calculating your employee’s Per Diem, you can either use rates broken down by US city, or you can use simplified standard Per Diem rates for high cost or low cost areas.  Domestic Per Diem rates broken out by state and city can be found at http://www.gsa.gov.

For standard Per Diem rates, firms can now give employees $258 per day for high cost areas, a $2 hike.  In other localities, companies are allowed to pay a daily stipend of $163 for lodging, meals and incidentals, an increase of $5.

For meals and incidentals only, IRS rates are now up to $65 per day for high cost areas and $52 for low cost areas.  Self employed individuals can use the meals and incidentals rate, but must substantiate lodging costs separately by saving receipts.  They can not use the $258/$163 rates.
Incidental rates only have nearly doubled to $5 a day, which is also an increase of $2.

With the rising cost of living, especially traveling, this will hopefully help cover some of these additional costs for your company.