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Travel for Schedule C

AndyG
Level 3

I would like to get further opinions:

In terms of travel expenses for a Schedule C--can a client claim the CONUS per diem amount for lodging for a trip if not a government employee? Or does it have to be actual expenses at a hotel or BnB? Or 0 if staying at a friend's home or reimbursed? I know that meal per diems can be included at the 50% rate. The client (in the performing arts), has heard differing opinions from different sources! 

Thanks in advance.

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Accepted Solutions
qbteachmt
Level 15

The client should stop listening to others and go to the IRS publications, to learn that the rules changed and many people don't know this, and get it wrong. The IRS still is issuing Meals and Entertainment guidance, for instance. You should also get the publications and subscribe to the e-newsletters, so that you always stay current in your profession on the regulations and how they apply to any of your clients' needs.

https://www.irs.gov/publications/p463

That tells you for instance: "There is no optional standard lodging amount similar to the standard meal allowance. Your allowable lodging expense deduction is your actual cost."

If staying at a friends and incurring no cost, then there is nothing incurred and nothing to deduct. Or, as a revered and long-dead community member once pointed out: You cannot write off what you did not write on.

"Reimbursed" is just a Charge to the customer and is part of Gross Revenue. Then your client keeps track of all costs, so this scenario changes nothing.

"The client (in the performing arts), has heard differing opinions from different sources!"

Examples: My spouse is a performing musician and also an "import" artist to Symphony Orchestras, which provide lodging. That means our tax tracking is meals and mileage, since lodging was provided. Or, a recording session out of town, they provide lodging and bring food to the studio sessions. So, we only incurred mileage for tax tracking.

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4 Comments 4
qbteachmt
Level 15

The client should stop listening to others and go to the IRS publications, to learn that the rules changed and many people don't know this, and get it wrong. The IRS still is issuing Meals and Entertainment guidance, for instance. You should also get the publications and subscribe to the e-newsletters, so that you always stay current in your profession on the regulations and how they apply to any of your clients' needs.

https://www.irs.gov/publications/p463

That tells you for instance: "There is no optional standard lodging amount similar to the standard meal allowance. Your allowable lodging expense deduction is your actual cost."

If staying at a friends and incurring no cost, then there is nothing incurred and nothing to deduct. Or, as a revered and long-dead community member once pointed out: You cannot write off what you did not write on.

"Reimbursed" is just a Charge to the customer and is part of Gross Revenue. Then your client keeps track of all costs, so this scenario changes nothing.

"The client (in the performing arts), has heard differing opinions from different sources!"

Examples: My spouse is a performing musician and also an "import" artist to Symphony Orchestras, which provide lodging. That means our tax tracking is meals and mileage, since lodging was provided. Or, a recording session out of town, they provide lodging and bring food to the studio sessions. So, we only incurred mileage for tax tracking.

*******************************
"Level Up" is a gaming function, not a real life function.
AndyG
Level 3

Thanks so much! This is what I had thought and communicated to him--but wanted to get other thoughts as well--

Was the lodging element part of recent changes? I knew there had been major changes in meels and entertainment.

 

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qbteachmt
Level 15

"Was the lodging element part of recent changes?"

Do you have any subscriptions to the e-newsletters? Then you get stuff in email that helps you stay informed.

https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-a-comparison-for-businesses

https://www.irs.gov/newsroom/irs-highlights-tax-reform-changes-that-affect-businesses

https://www.irs.gov/newsroom/e-news-subscriptions

 

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"Level Up" is a gaming function, not a real life function.
AndyG
Level 3

Thanks, again!

I do have a lot of the IRS subscriptions - but not all---and often, being a one-person office, I end up with a backlog--especially during tax season. I'll review all of these--and try and keep up! 

 

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