IRS Issues Per Diem Rates 2019 for deductible business travel expenses

The Internal Revenue Service issued Notice 2019-55 which elaborates new per diem rates 2019 effective from Oct. 1, 2019. These per diem rates are used for calculation of deductible business travel expense like lodging, meals and incidental expenses. Travel expenses are among the most common business expense deductions and also most litigation prone . The IRS notice also sets

  • Special transportation industry rate,
  • the rate for the incidental expenses only deduction, and
  • the list of high-cost localities and rates for that for purposes of the high-low substantiation method.

Readers should note that the use of a per diem rates for claiming travel expense as business expense is not mandatory if you can substantiate the actual allowable expenses by maintaining sufficient documentary evidence for proper substantiation of your claim. The following is a list of expenses you may be able to deduct depending on the facts and circumstances:

  • 50 percent of the cost of meals when traveling
  • air, rail, and bus fares
  • baggage charges
  • hotel expenses
  • expenses of operating and maintaining a car, including the cost of gas, oil, lubrication, washing, repairs, parts, tires, supplies, parking fees, and tolls
  • expenses of operating and maintaining house-trailers—provided using one is “ordinary” and “necessary” for your business
  • local transportation costs for taxi fares or other transportation between the airport or station and a hotel, from one customer to another, or from one place of business to another, and tips incidental to the foregoing expenses
  • cleaning and laundry expenses
  • computer rental fees
  • public stenographer fees
  • telephone or fax expenses
  • tips on eligible expenses
  • transportation costs for sample and display materials and sample room costs

Highlight of New Per Diem Rates

DescriptionPer Diem RatesLocality
Special meals and incidental expenses$66Any locality in continental USA
Special meals and incidental expenses71Outside continental USA
Incidental expenses only deduction$5 per dayInside or Outside USA
High-low substantiation method$297 any high-cost locality within the continental U.S
High-low substantiation method$200 Any other within the continental U.S

Please consult Notice 2019-55 for different rates in different scenarios