IRS boosts per diem rate

The Internal Revenue Service is boosting the per diem rate for travel expenses.

In September, the IRS announced that beginning Oct. 1 the allowable driver per diem will increase by $3 to $69 for those traveling in the continental United States. For travel outside the continental U.S., the rate will increase to $74.

The per diem is available for IRS Schedule C filers, which applies to owner-operators.

A $3-per-day boost for owner-operators is not insignificant since many long-haul truck drivers spend 250 days or more on the road each year. The full per diem of $69 multiplied by 250 days comes out to $17,250.

To qualify, the taxpayer must be away from their home residence or tax home longer than what would constitute an ordinary workday.

They must be away from their home long enough that they cannot complete the trip without sufficient sleep or rest.

Barry Fowler, the founder of Fowler Tax and Taxation Solutions in Houston, said new rates are in effect from Oct. 1 until Sept. 30, 2022. Specifically, they are the special per-diem rates, including the transportation industry meal and incidental expenses rates; the rate for the incidental-expenses-only deduction; and the rates and list of high-cost localities for purposes of the high-low substantiation method.

The updated rates are effective for per-diem allowances paid to any eligible truck driver on or after Oct. 1 for travel away from home on or after that date, Fowler said. The update supersedes the rates in Notice 2020-71, which provided the rates for Oct. 1, 2020, through Sept. 30, 2021.

This is the first increase since 2018-19, when it also was increased by $3. LL