Self-Employed Deductions

Self-employed? Traveling? Consider using the Standard Meal Allowance.

If you travel as a self-employed individual, you may be eligible to claim the standard meal allowance for each allowable travel day.

What is the allowance rate? Each year the IRS releases updated allowance rates prior to the start of the government’s fiscal year, which begins October 1. Here are the details….

  • For both the 2016-2017 and 2017-2018 fiscal years, the standard meal allowance is $51 per day.
  • The $51 rate applies to travel in the contiguous United States (CONUS).
  • If you travel to high-cost localities within CONUS, you may be able to claim a higher daily rate, available on the government’s General Services Administration website.

Are you eligible to use the standard meal allowance? If your duties require you (1) to be away from your tax home and (2) to sleep or rest to meet the demands of your work while away from home, you are traveling away from home and are eligible to deduct “ordinary and necessary” travel expenses, which would include the standard meal allowance. But don’t forget to prorate the allowance on days you depart and return.

What records should you keep? If you use the standard meal allowance, you do not need to track actual costs with receipts. Rather, you must keep records that prove the time, place, and business purpose of your travel.

Does the 50% limit apply? Yes, you can only deduct 50% of meal costs when using the standard meal allowance, just like actual costs.

What if your actual costs are higher than $51 per day? Use actual costs then! But make sure to keep receipts!

If you want more details, see IRS Notice 2017-54 and IRS Publication 463.