Effective January 1, 2004, the standard mileage vehicle rate increased to .375 cents per mile, up from .36 in 2003, for employees, self-employed individuals, or other taxpayers in computing the deductible costs of operating passenger automobile for business, charitable,medical or moving expense purposes.

Other Auto Figures

Employers may reimburse employees for the business use of their personally owned cars by way of the fixed and variable rate method (FAVR).

2003 Per Diem Rates

The per diem rates may be used by businesses to reimburse employee expenses for business travel and by employees and self-employed individuals to substantiate business travel expense deductions.

The per diem rate increases from $185 to $201 for travel to any high-cost locality, and from $115 to $124 for travel to any other locality within the continental United States (CONUS).  The federal meals and incidental expense (M&IE) rates under the optional high-low method have remained the same, $42 for high-cost localities and $34 in other localities.

Travel & Entertainment

IRS is really looking at receipts and mileage logs. If you fail to keep the receipts showing the business reason and fail to keep a mileage log just forget your deductions.
If you are keeping receipts and fail to get a receipt, record the expense on a separate piece of paper. Explain that you simply forgot to get a receipt. Generally IRS will accept the document as long as you are not habitual and make the recording on or about the time of the expenditure.
Most automobiles have a trip meter and some people use the trip meter as proof. However, actual odometer reading is what is required. IRS may choose to allow the trip meter but are not required to accept such.

Recordkeeping Tips

Tax Return Prep  | Bookkeeping
Estate Planning | IRS Audits & Representation | Home |
Investment & Retirement Planning

Copyright 1998 Downing & Associates, Inc. All Rights Reserved