If you travel away from home overnight for business you can deduct the cost of travel, lodging, meals and “incidental” expenses.
If your boss sends you on a business trip, the company usually picks up the tab. But there are times when you are out of pocket, such as attending a job-related convention. You may also travel away from home overnight for a job interview or job-related education.
Like the standard mileage allowance for business use of your car there is also a standard per diem allowance for meals and incidental expenses. And, as with auto use, you have the option of claiming the standard allowance or the actual cost.
Incidental expenses included in the per diem are tips to porters and hotel staff, but not laundry or phone calls.
The per diem you would claim is the rate used by the federal government for reimbursing government employees for travel, which is revised each year on Oct. 1.
Unlike the standard mileage allowance, which is the same all over the country, the meals and incidental expense per diem varies based on the destination. The allowance for New York is different than that for Corpus Christi, Texas, or for Albany, N.Y.
Click here for the per diem rates.
What determines the rate is where you sleep at night. If you have a business meeting in Manhattan, and eat all of your meals there, but are staying at a hotel in North Bergen, N.J., you use the lower New Jersey amount.
New Jersey tax pro Robert D. Flach has been preparing 1040s for individuals since 1972.