A non-owner employee can be reimbursed for expenses associated with an over-night business trip by either providing actual expense receipts or using a “per diem” rate. They can always submit their actual expenses and receipts or they can use a per diem that includes lodging, meals and incidentals.
Under the per diem method, there is also a separate rate for just meals and incidentals where the employee is claiming the actual lodging expense. Incidentals are fees and tips given to porters, baggage carriers, bellhops, hotel maids. It also includes transportation between your hotel and restaurant IF suitable meals are available at your hotel.
Incidental expenses do not include laundry, cleaning and pressing of clothing, lodging taxes, or the costs of telegrams or telephone calls. But, if the employee also owns 10% or more of the company, either directly or indirectly, the deduction for lodging is limited to their actual out-of-pocket expense. The good news is an owner-employee can still use the meal and incidental per diem. Currently, that is $39 generally, but some areas can be higher. For example, Atlanta is $49.
These rates change annually.
Current per diem rates can be found at http://www.assets101.com/mail/link.php?id=b7c589aPerDiem
You still will have to complete an expense report showing dates, location and business purpose of the trip. Remember, travel must be overnight for the reimbursement to be deductible to the company and not included in your income.
Reprinted by Permission. Copyright 2009 Dyches Boddiford. All Rights Reserved. The Oaks Group, PO Box 505, Marietta, GA 30061. Dyches is a National Speaker has been a MREIA featured speaker at past meetings. Visit www.assets101.com for more information.
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