@AdamM1
When you choose per diem, you are allowed to claim the entire per diem amount, 100%. Use this link for more info: Meal Portion of Per Diem Allowance
Prior to 2021, the IRS allowed an 80% deduction, however, temporarily for 2021 and 2022, the Federal Consolidated Appropriations Act of 2021 (FCAA), passed on December 27th, 2020, allows a 100% deduction on Per Diem.
When you are self-employed, you generally can deduct the ordinary and necessary expenses of traveling away from home for business from your income. But before you start listing travel deductions, make sure you understand what the Internal Revenue Service (IRS) means by "home," "business," and "ordinary and necessary expenses."
The IRS allows business travelers to deduct business-related meals and hotel costs, as long as they are reasonable considering the circumstances—not lavish or extravagant.
You would have to eat if you were home, so this might explain why the IRS limits meal deductions to 50% of either the:
- Actual cost of the meal
- Standard meal allowance
This allowance is based on the federal meals and incidental expense per diem rate that depends on where and when you travel.
Generally, you can deduct 50% of the cost of meals. Alternatively, if you do not incur any meal expenses nor claim the standard meal allowance, you can deduct the amount of $5 per day for incidental expenses. You can also deduct incidental expenses, such as:
- Fees and tips given to hotel staff
- Fees for porters and baggage carriers
But don't forget to keep track of the actual costs.
Tax Deductions for Business Travelers
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