Tax Deduction Meal Per Diems

Tax Deduction Meal Per Diems



Tax Deduction – Meal Per Diems
Per Diems deduction can be one of​ the​ best flight attendant deductions .​
This deduction depends on​ which city you​ layover in​ .​
The IRS states that you​ can either itemize each city you​ fly to​ or​ you​ may take a​ standard rate .​
If you​ fly domestic,​ this standard rate can work to​ your advantage .​
We are seeing a​ nice jump in​ them minimum about in​ 2018 .​
Previous the​ base rate was $31 a​ day for meals and incidentals; in​ 2018 the​ base rate has jumped to​ $39 .​
However keeping track of​ every city is​ important as​ many cities are substantially higher that the​ base rate,​ as​ high as​ $61 .​
Alaska and Hawaii can be as​ high as​ $91 .​
We have attached both 2018 and 2018 U.S .​
rates .​
Also realize that changes in​ per diem rates are from October to​ October,​ thus you​ need to​ keep track of​ locations times .​
a​ few seasonal cities even have seasonal per diem rates.
If you​ fly any international trips,​ it​ is​ well worth itemizing out your layover cities .​
The standard rate for International is​ $46 per day where as​ the​ daily rate for a​ common city such as​ London is​ $100 per day .​
Both Alaska and Hawaii are included on​ international rates .​
When figuring out your Per Diem,​ you​ use Meals and Incidental rates .​
For instance in​ Anchorage Alaska you​ take the​ Local Meal rate of​ $71 plus the​ Incidental rate of​ $18 for an​ M&I of​ $89 .​
International rates do not have the​ same October to​ October schedule of​ change.
If you​ just flew domestic,​ the​ IRS will allow us to​ use an​ average rate based on​ the​ number of​ days you​ flew .​
Turn arounds are not included in​ this deduction .​
Once you​ calculate the​ total amount you​ are allowed,​ the​ total non-taxable per diem that you​ were paid by your airline is​ subtracted.
Flight attendants get an​ additional break here .​
For the​ average work in​ America than can only deduct 50% of​ their meal expense .​
In 2018 Flight Attendants can deduct 70% of​ their actual expense or​ per diems,​ minus any nontaxable payments your employer paid you​ .​
This amount will climb to​ 80% by 2008
For Businesses,​ Self Employed
You can deduct 50 percent of​ ordinary and necessary business expenses for entertaining a​ client,​ customer or​ employee if​ it​ is​ directly related to​ your business or​ associated with your business .​
It is​ essential to​ keep excellent records for business entertainment expenses .​
For example,​ if​ you​ take someone out for a​ meal,​ be sure to​ document the​ date,​ the​ amount,​ the​ place the​ meal took place,​ the​ business purpose of​ the​ meal,​ and the​ business relationship .​
If you​ hold a​ party,​ you​ should keep a​ copy of​ the​ guest list,​ noting your respective business relationships.
IRS rules for business-related meals,​ entertainment and gifts allow you​ substantial opportunities to​ convert personal expenses into deductions.
How would you​ like to​ get a​ discount of​ 14% to​ nearly 20% on​ your meals and entertainment expenses? If your meals and entertainment expenses were deductible,​ a​ $100 meal would cost only $86.25 if​ you​ were in​ the​ 27% tax bracket.
Tax laws allow you​ to​ deduct half of​ your meals and entertainment expenses if​ they are business-related .​
Any expenses for food and drink provided under circumstances considered favorable to​ a​ business discussion,​ or​ when a​ business discussion is​ held,​ can be deducted .​
If you​ are self-employed,​ you​ can deduct them as​ part of​ your adjustments to​ income.
Entertaining Business Clients
By far,​ the​ most commonly used aspect of​ this deduction relates to​ entertainment and food,​ however .​
The custom of​ entertaining business clients or​ potential business clients with food and drink in​ restaurants and hotels converts into deductible expenses .​
When you​ go out with friends or​ relatives for a​ meal or​ drink,​ do you​ ever pick up the​ check? If they are or​ could be potential clients or​ customers for your business,​ and you​ discussed business with them,​ then that check would be deductible.
Even if​ you​ do not talk business at​ the​ meal,​ it​ will be deductible if​ the​ meal follows or​ precedes a​ business discussion .​
Recognize that no actual business need come from the​ meeting so long as​ business was discussed .​
Be careful,​ if​ you​ meet with some one regularly and exchange picking up the​ tab,​ you​ can face a​ tremendous penalty .​
If caught by the​ Internal Revenue Service,​ the​ deduction will be disallowed as​ a​ sham and subject you​ to​ fraud penalties .​
However,​ do not hesitate to​ deduct legitimate expenses.
Not only can you​ deduct meals,​ but you​ can also deduct business entertainment expenses .​
Money spent for business entertainment,​ amusement or​ recreation can be deducted if​ you​ can show the​ expense:
• Directly preceded or​ followed a​ substantial business discussion;
Or;
• Directly related to​ the​ active conduct of​ your trade or​ business.
• Examples of​ potentially deductible expenses include entertaining guests at​ nightclubs,​ theaters,​ sports games,​ or​ even vacation trips.
Do not waste much energy building up deductible entertainment expenses unless you​ are prepared to​ do it​ right .​
This area is​ always a​ target of​ audits and is​ one of​ the​ most abused of​ all expenses .​
Make sure that each receipt (or notation in​ your appointment book or​ business diary) has ALL FIVE of​ the​ following components:
• the​ amount of​ each expenditure;
• the​ date of​ the​ expenditure;
• the​ name,​ address or​ location,​ and type of​ expenditure,​ such as​ dinner or​ theater,​ if​ the​ information is​ not apparent in​ the​ name or​ designation of​ the​ place;
• the​ reason for the​ expenditure or​ the​ business benefit derived or​ expected to​ be gained .​
While this sounds complicated,​ it​ is​ really easy.
• Information about the​ person or​ persons entertained,​ including the​ name,​ title or​ other designation sufficient to​ establish the​ business relationship to​ you.
You must have a​ receipt or​ other documentary evidence for meals or​ entertainment expenses of​ $75 or​ more .​
Currently,​ for expenditures of​ less than $75,​ you​ do not need a​ receipt .​
In a​ recent audit,​ when asked for all of​ my receipts .​
I​ brought out only those over $75 and my records for the​ rest .​
The auditor had to​ take what I​ gave him as​ proof .​
Fully acceptable substantiation would include a​ diary or​ written planner in​ which you​ enter the​ above descriptive information .​
I​ put this information on​ my business software records .​
Even in​ an​ audit,​ the​ entries are complete substantiation under the​ law.
While most meals or​ entertainment expenses can only be deducted for half of​ the​ cost,​ certain meal and entertainment expenses remain fully deductible:
• Expenses reimbursed under an​ accountable plan;
• Expenses incurred for recreational or​ social activities provided by the​ employer for the​ benefit of​ its employees .​
These might be the​ annual company picnic or​ holiday party;
• Expenses for goods,​ services and facilities made available to​ the​ general public,​ such as​ promotional tickets or​ customer samples;
• Expenses related to​ the​ ticket package costs for sporting events arranged primarily for the​ purpose of​ charitable fund-raising.
The deductions for meals and entertainment allow you​ substantial opportunities to​ convert your personal expenditures into business deductions .​
Do not fail to​ claim them and do not fail to​ keep them because of​ lack of​ adequate substantiation .​
In the​ 30.5% tax bracket,​ $100 worth of​ entertainment expenses costs you​ $84.75 .​
No matter how much money you're making,​ it​ would be worth $15.25 in​ tax savings to​ spend 30 seconds noting the​ name of​ your business clients and the​ business discussion on​ the​ back of​ your ticket stub or​ receipt.




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