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Meals & Entertainment: (M&IE) Per Diem Allowance

For business travel, business owners can write off meals and incidental expenses (M&IE) based on IRS published per diem rates, or they can simply write off the actual expenses incurred. Think of this as only applicable to personal meals and incidentals when you travel away from your home (overnight stay required). Generally this is considered business travel at least 50 miles away from your home, but there are exceptions so ask your tax professional to be sure what applies in your case.

For more information on Meals and Incidental Expenses refer to IRS publication 1542 (Special Per Diem Rates 2016-2017 https://www.irs.gov/pub/irs-drop/n-16-58.pdf)

The M&IE per diem rate is still subject to the 50% deduction for "Meals and Entertainment" expenses. The Meals & Incidental Expenses per diem rate does not include Lodging and Travel expenses which, for a business owner, must be accounted for by writing off the actual expenses incurred.

Don't confuse the M&IE rule with business meals while entertaining a client. If you eat at a restaurant just down the street with a client to discuss business, you may write off your meal expense whether or not you paid for just your own meal or both meals.

In Deductr, expense your M&IE per diem expenses just as you would when tracking the actual expense. Use the "Cash" category as you are not actually giving yourself the money. Put "M&IE per diem rate" in the Description box and any other detail you want to add such as the nature of the business travel and distance from home. Use the "Restaurant" sub category under Meals and Entertainment to have Deductr automatically calculate the 50% deduction and reflect the tax savings on your home tab.

Consult your tax professional to see if this fits your circumstances. This is not to be taken as tax advice. Please refer to our End User License Agreement.

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