1. Can I use per diem as tax deduction for my travels if my LLC is taxed as a sole-proprietor (non-governmental)? 1a. If so, can I deduct the full amount of the per diem as stated on the GSA website, or 50% of the per diem? 1b. Can I claim lodging expenses in the same way I can claim the M&IE per diem -- that is, deduct the maximum allowable per diem for that city regardless of how much I actually spend?1c. for the first and last day M&IE to be calculated at 75% of allowable per diem, which city do I use? For instance, if I were flying from Boston to Miami on 12/1 and returned Miami to Boston on 12/14 then do I base the per diem rates to be Miami for 12/1 and 12/14?
State/Country relating to question: Massachusetts
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1. Yes, you can use the per diem rate for meals as a self-employed LLC owner.
1a. You can only deduct 50% of the per diem rate for meals.
1b. You can not claim the per diem for lodging as a self-employed. You must use actual expenses, but they are 100% deductible. The lodging per diem is only used by employers for determining employee reimbursements under an accountable plan. An employer would need to actually reimburse an employee at the per diem rate in order to deduct the travel expense.
1c. If Boston is your tax home, just use the Miami rate for the entire trip. If you have more than one travel stop away from home, use the rate for the location of the last stop of the day.
17 years experience in business and individual taxation specializing in small business and farming