Fortunately, you’re allowed to take a tax shortcut with full IRS blessing.
Strategy: Use the IRS-approved per-diem rate allowances for employee business trips in lieu of accounting for every donut and baggage-handling tip. The per-diem reimbursements are tax-free to employees up to the prescribed limits.
What’s more, your company can deduct the reimbursements in full. One exception: The 50% deduction limit on meal expenses still applies.
What are the new rates?
The IRS just announced per-diem rates for the coming year. (IRS revenue procedure 2006-41)
Good news: The approved per-diem rate for highcost areas increases to $246 ($188 for lodging plus $58 for meals and incidental expenses). That represents a s...(register to read more)
- Small Business Tax Deduction Strategies No matches