Tax travels of the ancient mariner

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. I am looking for information on per diem deductions for merchant seamen. I know that U.S. Transportation Department tax laws govern them, but are they eligible for the same per diem rates as regular employees? J.S.C., via e-mail

A. Yes. A merchant seaman is entitled to use the IRS-approved per diem rates for travel “away from home” without documenting each expenditure. However, this doesn’t give carte blanche to voyagers on the high seas. The Tax Court noted in a recent case that merchant seamen still must substantiate other travel elements, such as time, place, business purpose, etc. (Jewett, TC Memo 2004-26) Keep contemporaneous records as proof. Tip: You can find the per diem rates for different travel destinations at www.irs.gov/publications/p1542.

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