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IRS Meal Allowance

There are two ways to deduct meal costs:

  1. Actual costs
  2. The IRS standard meal allowance

Regardless of the method you use to deduct meal expenses while traveling away from home, you may only deduct 50% of the total amount of meal expenses (e.g., if you spend $300 on meals, only $150 is deductible). 

The 50% limitation also applies to meal and entertainment expenses for entertaining business associates in your own hometown.

Standard Meal Allowance

M&IE Rates (Meals and Incidental Expenses):

If you're self-employed and find it difficult to keep records of your meal costs while traveling away from home on business trips within the Continental United States (CONUS), you can use the Domestic Per Diem Rates.

The IRS publishes Publication 1542 Per Diem Rates for Travel Within the Continental U.S. (CONUS)

The rates in the tables coincide with the government's fiscal year, which runs October 1 thru September 30. For example, the 2013 fiscal year runs October 1, 2012 through September 30, 2013.

Applying the rates for 2012:

Keep in mind, most taxpayers use a calendar year (January 1, through December 31). Therefore, the first three months of the government's fiscal year (October, November, and December) represent the last three months of the calendar year.

The per diem rates may be updated at the start of the government's fiscal year (Oct., Nov. Dec.). If the rates are updated for the government's new fiscal year, the per diem rates for October, November, and December may be different from the per diem rates for the previous nine months (January through September).

Trips in the last three months:

For trips you took in the last three months of the calendar year (October, November, December), you have two options for applying the rates. Keep in mind, you must constitently use one of these options; you may not switch between options.

Get more information at the U.S. General Services Administration website.

The standard meal allowance does not apply to areas outside the continental United states (CONUS).

The Department of Defense establishes per diem rates for:

The U.S. Department of State establishes per diem rates for all other foreign areas.

Daily Meal and Incidental Expense Rate (M&IE Rate)

UPDATE -

Domestic Per Diem Rates Table for Fiscal Year 2011

The M&IE rates differ by location. The standard domestic M&IE rate for 2011 is $46.

There are about 3,000 counties in the Continental United States (CONUS). Therefore, if you choose to use the per diem rates for meals rather than your actual expenses, check the per diem rate table to find the correct rate for your primary destination.

Here is the 23-page, Domestic Per Diem Rate Table for Fiscal Year 2011 (PDF). 

It shows the lodging rates and M&IE rates (Meals and Incidental Expenses) by State, Primary Destination, and County.

CONUS Rates (Within the Continental United States).

The standard CONUS rate applies to all counties not specifically listed. Cities not listed may be located in a listed county. The standard CONUS rate for meals is usually $46 and lodging is $77. However, as the table shows, the rate may be higher depending on the domestic location.

You can get more information on the U.S. General Services Administration website.

GSA establishes the CONUS (continental United States) per diem rates. It provides the maximum reimbursement allowances up to which federal employees are reimbursed for expenses incurred while on official travel.

The M&IE allowance is broken down into:

The basic and high-cost area rates are determined by U.S. General Services Administration.

TIP: If you keep records of your meal expenses and it turns out that your actual meal costs were less than your meal allowance, you can still claim the higher allowance.

GSA Tables

If Employer is a Relative

Employees may not use the M&IE allowance if:

Travel Expense Records You Must Keep

Even though you use the meal allowance, you must still keep records of:

Transportation Industry Workers

Self-employed persons and employees in the transportation industry may elect to claim a special M&IE rate. This avoids having to apply CONUS or OCONUS rates on a locality-by-locality basis.

OCONUS:

Different rates apply for travel in Alaska, Hawaii, Puerto Rico, and U.S. possessions, as well as travel to foreign countries. Get the rates from the U.S. General Services Administration website.

Next:

Travel Expenses: Claiming the IRS Meal Allowance

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