IRS updates per diem rates for lodging, meals and incidental expenses
The Internal Revenue Service has issued its annual update describing the 2017-2018 special per diem rates that taxpayers can use to substantiate the amount of ordinary and necessary business expenses they incur while traveling away from home.
Notice 2017-54 outlines the special per diem rates, which take effect Oct. 1, 2017. The notice includes 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 meals and incidental expenses rates for taxpayers in the transportation industry are $63 for travel within the continental United States and $68 for anywhere outside the continental U.S.
The rate for the incidental expenses only deduction is $5 per day for any locality within or outside the continental U.S.
For the high-low substantiation method, the per diem rates are $284 for travel to any high-cost locale and $191 for travel to anywhere else within the continental U.S. The amount of the $284 high rate and $191 low rate that is treated as paid for meals is $68 for travel to any high-cost locality and $57 for travel to any other locality within the continental U.S.
The per diem rates in lieu of the rates for the meal and incidental expenses only substantiation method are $68 for travel to any high-cost locality and $57 for travel to any other locale within the continental U.S.
The notice also provides a list of high-cost localities, which have a federal per diem rate of $238 or more.