If you are a sole proprietor / self employed, you can only use the Per Diem rate for meals and incidental expenses. Meal expenses are deductible if your business trip is overnight or long enough that you need to stop for substantial sleep or rest to properly perform your duties- so yes to overnight trips, most likely no on the day trips. However, the first and last day you travel the Per Diem is generally calculated at 75% of the full rate- so if you do mostly one-night trips, you would take the day rate and multiply by .75 to get your deduction for the day.
You can figure all your travel meal expenses using either of the following methods:
- Actual cost. If you use this method, you must keep records of your actual cost.
- The standard meal allowance, which is the federal meals and incidental expense (M&IE) per diem rate
This generally means that you are not locked into one method, so if your expenses are higher than the M&IE rate, be sure to save the receipts so you can deduct the higher amount (but you must have all the expenses for that day so be sure EVERY receipt has the date very legible if you use both methods).
You still must substantiate the time, place, and business purpose of their travel expenses for each travel day, but you do not have to keep track of every expense receipt.
@Matt136.
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