Deductions & credits

The 10% ownership rule applies to personal non-reimbursed business deductions and does not affect using the per diem rates, but rather the fact that specific documentation pertaining to the expenses covered by the per diem issued must be maintained.  

Per IRS Pub 463 (revised in 2021):

A per diem or car allowance satisfies the adequate accounting requirements for the amount of your expenses only if all the following conditions apply. 

• Your employer reasonably limits payments of your expenses to those that are ordinary and necessary in the conduct of the trade or business. 

• The allowance is similar in form to and not more than the federal rate (defined later). 

• You prove the time (dates), place, and business purpose of your expenses to your employer (as explained in Table 5-1) within a reasonable period of time. 

• You aren’t related to your employer (as defined next). If you are related to your employer, you must be able to prove your expenses to the IRS even if you have already adequately accounted to your employer and returned any excess reimbursement.

• Related to employer
  • You are related to your employer if: 
    • Your employer is your brother or sister, half-brother or half-sister, spouse, ancestor, or lineal descendant; 
    • Your employer is a corporation in which you own, directly or indirectly, more than 10% in value of the outstanding stock; or 
    • Certain relationships (such as grantor, fiduciary, or beneficiary) exist between you, a trust, and your employer

Here is the Link to the Publication section.

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