IRS Issues Per Diem Rates for 2024
This week, the IRS issued Notice 2023-68 announcing the special per diem rates for 2024 effective October 1, 2023. After rates have increase the last couple years, rates are set to remain at $69 for travel in the continental United States and $74 for travel outside the continental United States.
While the per diem rates remain the same, there will be some changes from the taxability standpoint. For calendar years 2021 and 2022, there was a 100% tax deduction for meals (which included per diems). Effective January 1, 2023, the taxability rules reverted back to the previous deductibility, where normal meals are 50% deductible, and per diems would be 80% deductible.
This will be another thing that transportation companies will have to deal with come early 2024 when they begin filing their tax returns. With freight rates decreasing over the last 12 months, and costs (driver pay, insurance, overhead, etc) increasing transportation companies are seeing a decline in profits and operating capital. So while income may be down, actual tax could be up due to some of the tax law changes for 2023.
See IRS Notice 2023-68 for more information.
Andy is a CPA and trusted advisor with 15 years of experience providing tax, accounting, assurance, and consulting services to transportation industry owners and operators. He is a tax principal with CLA in the Minneapolis, MN office. He also consults with high net worth individuals and owners of closely-held transportation businesses on all aspects of tax planning, estate planning, and retirement planning. Andy is also the tax leader for transportation industry across CLA.
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