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Sandi Hargrove, SkyHawks
Sandi Hargrove, SkyHawks, Master Tax Advisor, Enrolled Agent
Category: Tax
Satisfied Customers: 1257
Experience:  I am a Master Tax Advisor and Enrolled Agent. I have 40 years experience. Trucking specialist.
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Schedule C Per Diem Deductions

Customer Question

I am an entertainer filing schedule C, I travel 300 days a year, to client specified sites. Can I deduct 100% of the $35 per diem for my meals while I travel?
Submitted: 13 years ago.
Category: Tax
Expert:  T. R. Miller, The SunTaxMan replied 13 years ago.
Who is paying the $35.00 per diem?
Is this a figure this is being reimbursed to you?
Is this the amount you are using as a per diem expense amount?

And I would remind you this $35.00 amount is not an amount to apply to ALL meals for 2003. (See publication 1542). The rates changed DURING 2003 and different rates apply to different locations within and different location without the continental US.

Beyond these parameters, there are others to consider, but one thing at a time.

But, to answer your basic question, NO, you cannot deduct 100%
Customer: replied 13 years ago.
Thank you for your reply. I am using the per diem instead of keeping all of my receipts for meals when I travel on business.
So to answer your question, this is the amount I am using as an expense amount.

I need to know if I am subject to the 50% limit on the per diem or if I qualify for not being limited.

I just ask because there was something in my software that mentioned self employed people not having to be limited to 50% which is what I am, self employed.

And it also mentioned people who are independent contractors with meals included on their 1099.
And I thought I may fall into one of these categories.
Thank you for your help.

Expert:  T. R. Miller, The SunTaxMan replied 13 years ago.
Per Diem, without receipts is fine, just remember the rate is not the same for all locations.

50% limitation, yes!

Pub. 1542 has list of locations and the rates that apply to each - you MUST track the locations - if you want to take advantage of the higher rate available for many destinations.

In addition, the 24 hour day is divided into 4 6 hour quarters and your trips begin and end at HOME, not when you arrive and depart from the destination. You can deduct only the quarters of the beginning and ending day of each trip that you are involved with.
Expert:  Sandi Hargrove, SkyHawks replied 13 years ago.
You must be away from your "tax home" overnight(or long enough that to stop for rest or sleep is required or adviseable) or your residence if you have no "tax home".

The rate for high cost area for Jan-Oct is 45(Nov-Dec 46)

The rate for low cost area for Jan-Oct is 35(Nov-Dec 36)

An average rate for Jan-Oct is 40 (Nov-Dec 41)

Form 2106(or Schedule C) will reduce the actual deductible amount to 50% of this expense.

Expert:  Sandi Hargrove, SkyHawks replied 13 years ago.
Self employed persons and employees who are subject to Department of Transportation limitations on their hours of work are eligible for a higher than 50% amount. This is usually over the road truckers, taxi drivers, pilots, train engineers, etc.