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 Per Diem on Route shops?
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MichaelinNH
Star Contributor

New Hampshire
USA
488 Posts

Posted - 06/11/2011 :  06:22:47 AM  Reply  Reply with Quote
Does anyone know (or use) any type of IRS approved or allowed type of per diem for daily food expenses? When I worked for the government in the 80's we would get so much for breakfast, lunch, dinner and room. You were allowed the total and it did not matter if you spent more on one meal then another. For the room I use the actual expense. But I find I don't eat too much at breakfast or lunch when I am on the road.

I would like to know of and use a daily rate if it exists to make my record keeping simpler. I did search and could not find this as an existing topic.

MSPA Gold 8/9/2006 MSPA Silver 6/23/2007
Video Shopper Certified 6/9/2011 NV Workcard R-061144. Shopping 50 States, Puerto Rico & Canada.

MaresyDotes
Member

Leesburg, FL
USA
30 Posts

Posted - 06/11/2011 :  06:48:53 AM  Reply  Reply with Quote
I found the following information on investopedia. It looks like you can only write off meals if you are entertaining a client. You probably were paid for meals by the government agency, not an IRS tax write off. When I worked for Amtrak and they paid me in my paycheck for certain meals and my hotel room was free:

Meals and Entertainment: To deduct meals and entertainment (meals being considered the most common business entertainment expense), you must conduct business with the person you are entertaining during the meal/event or immediately before or after it. Unlike other deductions, these expenses are only 50% deductible, not 100%. Examples of deductible expenses in this category include tickets to a sporting event, the cost of a meal (with beverages, tax and tip), or the cost of a game of golf. Make sure to keep meticulous records of what business activity you conducted, when, with whom, and how it directly relates to the entertainment expense; keep your receipts. This area is audit-prone because many people try to cheat the system here.

Read more: http://www.investopedia.com/articles/tax/09/self-employed-tax-deductions.asp#ixzz1OyUoqgjT
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Cilla
Star Contributor

MD
USA
1433 Posts

Posted - 06/11/2011 :  07:49:43 AM  Reply  Reply with Quote
There is a difference between the "meal and entertainment" category and the "travel expenses" catgory. It is the latter that allows the taxpayer, on overnight travel away from home for business purposes" to deduct reasonable meal expenses. Receipts (or credit card records) will be required. The problem with the per diem amounts allowed for government works or contracts who are on travel status is that the rate varies by metro area. If you are constantly moving around it can be a major PITA to look up the area rate. Moreover, I am not aware of any "blessing" by the IRS for using those per diem amounts as "automatic" amounts not requiring receipts for non-goverment-related travel expenses. (Flash: I expect that you know more about this than I do!)

The "meals and entertainment" category provides for writing off as a business espence less than 100% of your costs of dining with/entertaining business associates while conducting a business interchane. This category does not require that you be away from home on travel status (i.e., overnight) but the documentation requirmenets are stricter. So, if Flash comes to DC and I take her out to lunch so that we can discuss the latest and greatest tax management ideas for MSers, I can pay for both lunches, and even some wine, and, if I comply with the IRS regs, I can deduct a part of the cost.

Cilla
MSPA Gold Certified 2005
IMSC Certified 2009
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MichaelinNH
Star Contributor

New Hampshire
USA
488 Posts

Posted - 06/11/2011 :  08:59:06 AM  Reply  Reply with Quote
So I need to keep retaining those receipts.

I was hoping for an easy, generally accepted method that the IRS would recognize. Even if it was only $25.00 a day. I missed most of the tax session in Orlando. I will ask in Las Vegas just in case. I don't spend that much when I am on the road. I take advantage of the free coffee and breakfast in many locations and buy bags of apples, oranges, boxes of raisins and cases of water at Aldi and avoid restaurants most of the time unless being paid to be there.

MSPA Gold 8/9/2006 MSPA Silver 6/23/2007
Video Shopper Certified 6/9/2011 NV Workcard R-061144. Shopping 50 States, Puerto Rico & Canada.
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KentB
Member

Cordova, TN
USA
32 Posts

Posted - 06/30/2011 :  7:18:12 PM  Reply  Reply with Quote
The whole purpose of using Per Diem is that you do NOT need to keep receipts if using this method. The IRS publication that lists the rate for each major city in the US is Pub 1542. It is available at http://www.irs.gov/pub/irs-pdf/p1542.pdf

Please understand that you can only deduct your own meals if you are on an overnight business trip. Use Schedule C (Profit or Loss from Business) for self-employed folks, or Form 2106 (Employee Business Expense) for employees to deduct meals and other travel expenses.

When you fill out your tax return you only get to deduct half of the meal allowance. On the first and last day of your overnight trip, you only deduct 75% of the per diem rate.

If you have a long route and are in different cities for differnt meals or are in a city not listed in Pub 1542, you use the rate of $46 per day. For truckers and other transportation workers the rate is $59.

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.

There is also another standard rate for hotels. That rate is listed in the same publication, and is $70 per night for cities not listed.
You do need a receipt if the expense that you claim is over $75 per night.

All of the truckers that I do tax returns for use the "standard meal allowance". It can mean a tax deduction in the neighborhood of $10,000 for those people that are on the road more than at home. One husband and wife team that drove together got twice that.

Hope this helps,

Kent Burghard, Merchandiser and Senior Tax Advisor
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MichaelinNH
Star Contributor

New Hampshire
USA
488 Posts

Posted - 02/18/2012 :  08:04:14 AM  Reply  Reply with Quote
I found the standard $46.00 per day rate. I use my actual amounts for lodging. I found that part of the code to state I did not need to keep receipts for anything under $75.00, except for lodging.

Did you mean you don't need to keep receipts UNDER $75.00.

These are the two things I found this year. It appears I can use the $46.00 rate for each day out of town on a route trip, but that I can only use 50% of the daily rate because I am not part of a standardized reimbursement policy, because I am an independent contractor that is not part of a formal plan.

The Following is from IRS.gov site.

There is no optional standard lodging amount similar to the standard meal allowance. Your allowable lodging expense deduction is your actual cost.

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.

Use of the standard meal allowance for other travel. You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. You can also use it to figure your meal expenses when you travel for qualifying educational purposes. You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes.

Amount of standard meal allowance. The standard meal allowance is the federal M&IE rate. For travel in 2011, the rate for most small localities in the United States is $46 a day.

Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. These rates are listed in Publication 1542, Per Diem Rates, which is available on the Internet at IRS.gov.

And... 50% limit may apply. If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount. The 50% limit is discussed in more detail in chapter 2, and accountable and nonaccountable plans are discussed in chapter 6.


MSPA Gold 8/9/2006 MSPA Silver 6/23/2007
Video Shopper Certified 6/9/2011 NV Workcard R-061144. Shopping 50 States, Puerto Rico & Canada.
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MattMS
Star Contributor

Genoa, Illinois
USA
360 Posts

Posted - 02/22/2012 :  07:16:45 AM  Send MattMS an AOL message  Reply  Reply with Quote
MichaelinNH - you are correct. You can use $46 per day rate, unless you were in one of those other ares. Be careful that you must be away from home *overnight* to use this. A long, 18 hour route does not count. (Not saying you don't understand this, but many people think that would count.)

Your real issue comes if you are getting reimbursed for some/all of your meals from a mystery shopping company. This would then be part of your reimbursement and you could only deduct 50% of the amount above the reimbursed amount.

From the IRS publication:

Note - To be an accountable plan, your employer's reimbursement or allowance arrangement must include all of the following rules.

Your expenses must have a business connection that is, you must have paid or incurred deductible expenses while performing services as an employee of your employer.

You must adequately account to your employer for these expenses within a reasonable period of time.

You must return any excess reimbursement or allowance within a reasonable period of time.

-------------------------

Being reimbursed for a mystery shopping required meal purchase, to my understanding, falls under an accountable plan. The meal clearly has a business relation (required, duh!). We must adequately account for these expenses (receipt) and if they had forwarded us money (which they don't) you can be damn sure they're require it back IMMEDIATELY if not sooner!

Matthew - shopping North Central & North West Illinois
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