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Say you are in the US. You are self-employed. During the year you have to travel to country X (say, Japan) for 20 days to see one of your clients. It is pure 100% business travel.

For travel within the US (if I'm not mistaken) you look up the standard Lodging amount per day, and standard M&IE amount per day, for the city in question. (Example from the GSA.) You are then (I think?) allowed to deduct one-half of both of those two amounts combined, per day.

So, regarding international travel.

So, you were in Japan for 20 days....

I believe you have to start on the State department web site to get the "standard" per diem: https://aoprals.state.gov/web920/per_diem_action.asp?MenuHide=1&PostCode=10273

enter image description here

My questions,

(1) For the "20 days in Japan". In fact what do you claim as the accommodation expense? Is it 276/day? Is it one half of 276/day? Is it your actual hotel expenses? Or something else altogether?

(2) Then for M&IE. For the "20 days in Japan". Is your deduction the 227/day seen in that image? Or half of that? Or something else?

  • 1
    The issue that might stop some people from answering is that I only know the rules as an employee on a federal contract. If I follow the rules my employer can charge the government, and none of this is considered as taxable income for me. How it works for somebody self employed: i have no idea. I do have a general suggestion: ask your accountant. – mhoran_psprep Sep 29 '18 at 17:31
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+250

The premise regarding domestic business travel is incorrect. A self-employed traveler can deduct 50% of meals, and can use per diem rates in lieu of actual meal cost -- but lodging is not subject to the 50% reduction and must be actual rather than per diem. Self-employed international business travel follows the same rules.

See this summary :

Page 6, Paragraph 4 of that PDF "The per diem method can be used by employers, employees and self-employed individuals. Self-employed individuals and employees can only use the per diem method for meal and incidental expenses, not lodging."

Also see IRS Publication 463 :

"Table 1-1. Travel Expenses You Can Deduct", notes, cautions: "There is no optional standard lodging amount similar to the standard meal allowance. Your allowable lodging expense deduction is your actual cost."

  • @Fattie Search that linked H&R Block doc for "per diem" and you'll see: "Self-employed individuals and employees can only use the per diem method for meal and incidental expenses, not lodging." Also, the TurboTax answer is incorrect or out of date, because the IRS Pub 463 linked there says: "There is no optional standard lodging amount similar to the standard meal allowance. Your allowable lodging expense deduction is your actual cost." – nanoman Oct 7 '18 at 0:01
  • magnificent nanoman, thanks. (For anyone reading this thread, THIS QA on turbotax would appear to be incorrect; it says: "allows you to use the GSA.gov per diem amounts for both lodging and [incidentals]": as nanoman explains here that turbotaxQA appears to be simply incorrect / out of date. – Fattie Oct 7 '18 at 14:55
  • When I asked my tax company, they were also totally incorrect. What a world. – Fattie Nov 7 '18 at 14:43

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