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  4.  » IRS Announces 2020 – 2021 Per Diem Rates

IRS Announces 2020 – 2021 Per Diem Rates

by | Sep 14, 2020 | Firm News

Business owners, sole proprietors, contractors, and employees who are not otherwise paid a per diem while traveling away from home for business may claim a deduction on their taxes for the expenses incurred while traveling.

The IRS recently updated 2020-2021 per diem rates to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home on or after October 1, 2020.

Special transportation industry per diem meal and incidental expense rates for 2020 – 2021 are $66 for localities of travel within the continental US and $71 for localities of travel outside the continental US.

The 2020 – 2021 per diem rate for the incidental expenses only is $5 per day both within and outside the continental US.

Detailed location- and time-of-year per diem rates for lodging and meals are set by the General Services Administration (within the continental US) and the Department of State (outside of the continental US).  As an alternative to using individual per diem rates for the hundreds of possible travel locations, the IRS allows taxpayers to use a simplified method (the High-Low Substantiation Method) for locations within the continental US. You choose either the high or low per diem rate, depending on the time of year and location of the city you are traveling to.  The 2020 – 2021 listing of high-cost localities can be found on the IRS web site at:  https://www.irs.gov/pub/irs-drop/n-20-71.pdf

For 2020 – 2021, the lodging, meals and incidental expense per diem rates are $292 for travel to any high-cost locality, and $198 for travel to other localities within the continental US.  For meal and incidental expenses only (no lodging), the per diem rates are $71 for travel to high-cost localities, and $60 for travel to other localities within the continental US.

You can visit the IRS website for additional information.  Also, be sure to check our website for further IRS announcements.

Willi Law Office, LLC has been providing personalized legal services to individuals and businesses in Westerville and Central Ohio for over 20 years.