In this month’s video, I explained what types of business meals are deductible. Since meals can be frequent and for small dollar amounts, I get more questions about tracking these receipts than any other expense. In the case of travel meals, an IRS rule allows you to throw those receipts all away. Instead of tracking and deducting each specific expense, you can deduct a per diem rate for your travel meals.
This per diem rate is the Meals and Incidentals rate issued by the GSA. For most of the U.S., that rate is currently $55 per day. Many metropolitan areas qualify for a higher rate. You can check your travel destination here. If you use this standard rate, then you no longer have to track your individual purchases and receipts.
Instead of tracking each purchase, you track the number of days that you are away from home. Those days need to be tracked in two categories, first/last day and main days. For every trip you make, you will keep the first and last day separate from the middle days of your trip. The deduction for the first and last days is 75% of the rate for that location.
This method simplifies record keeping, but sometimes you can get a larger deduction by keeping up with the individual receipts. This may be true for shorter trips, like a conference, where you buy several expensive meals in a day. On a long-term locums assignment, you are likely to come out better by taking per diem. It all depends on your purchasing habits, so you will want to think about that before deciding on a method.