IRS’ simplified per diems for lodging, meals and incidentals are rising: In high-cost localities, employees can get up to $259 per day free of tax, up $8. In other areas, the amount of their daily stipend is capped at $172…a $2 increase. See www.kiplinger.com/letterlinks/perdiems for details.
Firms now using this method have the choice of applying the new rates on Oct. 1 or waiting until Jan. 1, 2015. 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 $259/$172 per diem for lodging, meals and incidentals. The per diem rate solely for incidental expenses stays at $5 a day.