How to Claim a $66 Daily Per Diem Deduction for Travel

Highlights

If you travel for work, you may be able to claim a $66 daily per diem deduction to offset your meal and incidental expenses. This IRS-approved deduction allows self-employed individuals and employees to simplify expense tracking while ensuring they comply with federal tax rules. Below, we break down how the deduction works, who qualifies, and how to calculate and claim it properly.

• Per diem deductions are set daily rates used to cover travel-related expenses like meals and incidental costs.
• The IRS and GSA set these rates each year based on cost-of-living differences.
• $66 per day is the standard meals and incidental expenses (M&IE) rate for most travel locations in the continental U.S.
• Travelers must be away from their tax home overnight for business purposes to qualify.
• Self-employed individuals can deduct per diem on Schedule C. Employees must use accountable plans through their employer.
• Methods like the high-low substantiation method help simplify recordkeeping for travel in high-cost and standard locations.

Introduction

Per diem deductions are an efficient way to handle work travel expenses. Rather than tracking each meal and incidental expense, taxpayers can use pre-approved daily rates issued by the General Services Administration (GSA) and the Internal Revenue Service (IRS). These rates make it easier to comply with IRS tax rules while reducing the burden of collecting and submitting receipts for each individual purchase.

Per Diem Deductions for Travel

“Per diem” means “per day” in Latin. In tax terms, it refers to a fixed daily allowance provided to employees or self-employed individuals to cover costs such as

• Meals (breakfast, lunch, and dinner)
• Incidental expenses (tips, service charges, laundry, etc.)
• Lodging (optional if not covered separately)

Rather than tracking actual expenses, eligible taxpayers can use these daily rates when traveling for business.

What Does the $66 Daily Rate Cover?

The $66 daily deduction specifically covers meals and incidental expenses (M&IE) for standard locations in the continental U.S. This rate is commonly used by:

• Self-employed business travelers
• Federal contractors
• Employers using simplified reimbursement methods

The M&IE rate varies by location. In high-cost areas, this rate can go up to $79 per day or more.

Eligibility for the $66 Per Diem Deduction

• Self-employed individuals can deduct the M&IE portion of per diem using Schedule C.

• Employees must use an accountable plan through their employer for reimbursement. If the employer does not use such a plan, per diem may be treated as taxable income.

Conditions to Qualify

To claim the per diem deduction:

• You must travel away from your tax home (typically your principal place of business).
• The travel must be overnight or long enough to require sleep or rest.
• The travel must be business-related.
• You must maintain records of the travel, including dates, locations, and the business purpose.

How to Calculate Your Per Diem Deduction

1. Standard Rate Method

The IRS standard M&IE per diem rate for 2024 is $66 per day for most U.S. locations. You can deduct:

• 100% of M&IE for full travel days
• 75% of M&IE for the first and last day of travel

For example, if you travel for 3 full days and return on the 4th day:

• (3 × $66) + (1 × $49.50) = $247.50 deduction

2. High-Low Method

The IRS allows a high-low method to simplify calculations based on whether your destination is a high-cost or standard area.

This method is especially helpful for employers managing employee reimbursements or freelancers visiting multiple cities.

Recordkeeping Requirements

To comply with IRS requirements:

• Track dates of departure and return
• Note the location of travel
• Include the business reason for the trip
• Retain documentation or logs for audit protection

Even though receipts aren’t needed for M&IE under the per diem method, the IRS still requires substantiation of the time, place, and purpose of each trip.

Tax Filing Tips

For Self-Employed Individuals:

• Deduct per diem on Schedule C, Line 24a (meals and entertainment)
• Only 50% of meal expenses are deductible
• Lodging must be claimed separately if using actual costs

For Employees:

• Use per diem only if your employer uses an accountable plan
• Otherwise, per diem reimbursements may be considered taxable wages

Conclusion

The $66 per diem deduction is a smart and simple way to manage business travel expenses. It allows workers and entrepreneurs to focus on their work without worrying about every receipt. By using per diem rates, you reduce paperwork, comply with IRS rules, and potentially lower your tax bill. Be sure to follow eligibility guidelines, maintain proper records, and choose the right calculation method for your needs. When in doubt, consult a tax professional to make the most of your deductions.

Frequently Asked Questions

Is per diem taxable for employees?

Per diem is not taxable if paid under an accountable plan, where employees:

• Return unused amounts
• Provide time, place, and business purpose
• Submit records within a reasonable timeframe

If not, excess per diem becomes taxable income.

Can I claim both lodging and per diem?

Yes, but you must separate the two:

• Claim per diem for meals and incidental expenses
• Use actual receipts for lodging (unless your employer includes lodging in the per diem)

Are per diem deductions subject to the 50% meals limitation?

Yes. Self-employed individuals may only deduct 50% of the M&IE per diem amount on their tax returns.

Written by Jason Zweig Updated June 13, 2025 by Albert Fang