self-employed using per diem + M&IE...please advise
self-employed, travel ~100-days/year US & international since 1989;
have always deducted actual expenses, saved receipts, etc. but my expenses almost always less than current per diem + M&IE; will be calling IRS to ask questions, but seeking comments: 1. IRS allows self-employed to use Per Diem + M&IE rates & no receipts required, right? (according to tax guide just read) 2. if I know in advance that Per Diem + M&IE rates are higher that what I typically spend (especially due to points-miles), am I not allowed to do so as it is tax cheating? :confused: :confused: :confused: 3. ground transport at destination is included in M&IE, but what about flights to-from destinations -- can they be a separate actual expense with receipts? 4. if I have always deducted actual expenses, can I switch to Per Diem + M&IE for 2019 taxes? Any other comments-advice appreciated. ^ ^ ^ |
You have adopt a business practice of one or the other. You can't do this on a per trip or per day basis, e.g. calculate your expenses and then decide which to use.
So, the key is to do some rough calculations and choose the method which is most advantageous to you. Don't forget that using the per diem method means less paperwork. You will still need to keep receipts for air travel and hotels, car rentals, and parking (exceeding $25). |
Originally Posted by Often1
(Post 31351737)
You will still need to keep receipts for air travel and hotels, car rentals, and parking (exceeding $25).
If lodging & ground transportation are included in PerDiem, but PerDiem doesn't require receipts, why still need receipts for hotel-rental car-parking over $25. Or is it $75 in 2019? Receipts prove travel? Would cc statement prove travel & replace need for individual receipts? Also, in my case, photos prove travel... Other comments appreciated! ^ ^ ^ |
Where are you getting your M&IE rates?
If these are the GSA rates which IRS permits others to adopt if they wish, they do not include travel or hotel. I guess that it would be best if you posted the specifics of what you are looking at. |
Originally Posted by Often1
(Post 31351810)
Where are you getting your M&IE rates?
https://aoprals.state.gov/web920/per_diem.asp non-US https://www.gsa.gov/travel/plan-book/per-diem-rates Continental US Is it correct that self-employed can use M&IE rates rather than actual M&IE expenses but can never use Lodging Maximum rates -- they must use actual lodging rates...? (lodging rates)** + (M&IE rates) = PerDiem rates **not available to self-employed aside: wife travels with me & prepares daily itinerary full of photo opportunities, does that open up possibility of employer-employee relationship which then opens up legit per diem lodging usage...? An example reason for doing so: Edinburgh UK lodging rate = $507 whereas we might use points or AirB&B for $75-100 nightly... |
I am self employed.
It is my understanding that self employed can only use the M&IE per diem and not lodging. From the IRS Who can use the standard meal allowance. You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses. https://www.irs.gov/publications/p46...ublink10009927 Do you actually have a corporation? Or sole proprietor? As for the wife issue and the employer/employee -- is she an employee? Do you withhold taxes from her paycheck? And even if a corporation and have her employed you run into the issues of the related to your employer problem: Per Diem and Car Allowances
Related to employer. So no I think the per diem lodging is out on the spouse and on the self employed. And honestly I would not even try to do something too clever with trying to argue spouse as employee. You are related to your employer if:
basically it sounds too much like trying to inflate expenses. Do you have a proper accountant? |
Originally Posted by arttravel
(Post 31352793)
I am self employed....
I think the per diem lodging is out ...on the self employed. I had hoped IRS publication never stating, "self-employed cannot use lodging rates" was an open door to using lodging rates... but am now sure call to IRS will confirm lack of printed disallowing does not equal allowing... |
Originally Posted by TravelPhotographer
(Post 31351389)
... Any other comments-advice appreciated. ^ ^ ^
|
Originally Posted by TravelPhotographer
(Post 31354394)
Thanks for response.
I had hoped IRS publication never stating, "self-employed cannot use lodging rates" was an open door to using lodging rates... but am now sure call to IRS will confirm lack of printed disallowing does not equal allowing... |
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