The Internal Revenue Service has announced the new 2014-2015 per diem rates that taxpayers can use, starting October 1, to substantiate their expenses for lodging, meals and incidental expenses when traveling away from home.
The rates in Notice 2014-57 include 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 special meal and incidental expense rates for taxpayers in the transportation industry are $59 for travel in the continental United States and $65 for travel outside the continental United States.
The rate for any locality of travel inside or outside the U.S. for the incidental expenses only deduction is $5 per day.
For purposes of the high-low substantiation method, the per diem rates are $259 for travel to any high-cost locality and $172 for travel to any other locality within the continental U.S. The amount of the $259 high rate and $172 low rate that is treated as paid for meals is $65 for travel to any high-cost locality and $52 for travel to any other locality within the continental U.S.
The per diem rates using the meal and incidental expenses only substantiation method are $65 for travel to any high-cost locality and $52 for travel to any other locality within the continental U.S.
The notice also provides a list of high-cost localities that have a federal per diem rate of $216 or more
Use of a per diem substantiation method is not mandatory, the IRS noted. A taxpayer may substantiate actual allowable expenses if the taxpayer maintains adequate records or other sufficient evidence for proper substantiation.
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