IRS simplifies per diems for lodging, meals, and incidentals inch upward: In high cost localities, employees can get u to $251 per day free of tax, up $9. In other areas, their daily stipend is capped at $170…an increase of $7.
Go to www.kiplinger.com/letterlinks/2014perdiemsfor all details on the rules, including the list of high cost locales.
Companies that currently use this method have the choice of applying the new rates on Oct. 1 or waiting until Jan, 1, 2014. For meals and incidentals only, the rates remain unchanged…$65 a day in high-cost areas, $52 elsewhere. Self-employeds on travel can use these rates instead of keeping receipts, but their lodging costs must be substantiated separately. They cannot use the full $251/$170 per diem for lodging, meals and incidentals. The per diem rate solely for incidental expenses remains $5 a day.