A “related party” is generally a 10% owner of a “C” corporation or 2% owner in an “S” corporation or partnership. For many expense items these people were left out of the best benefit rulings. Prior to October 1, 2000, expenses could be reimbursed only when there were actual receipts. The new law allows these “relatives” to use a per diem rule for meals using the Federal per diem charts. These are schedules of allowed costs for meals based upon what city you are visiting. It is a flat amount that would not require actual receipts. (We still recommend that you retain all documentation regarding any travel, meals and incidentals for your business!!) Please note that these flat amounts are for meals only! Lodging and incidental expense reimbursement is still by receipt only for actual costs incurred.
If anyone would like a copy of the Federal Per Diem rate charts, please call Agency Consulting Group at 856-779-2430 and request them.
INCREASED STANDARD MILEAGE RATES FOR 2001
The past couple of years have seen standard miles for vehicles fluctuate from 32.5 cents to 34 cents to 32.5 cents and back to 34 cents. For 2001, IRS changed it again!! You may now deduct 34.5 cents per mile. The depreciation portion of this amount has been increased to 15 cents per mile. You will need to know how much depreciation has been used when you sell or trade your business use vehicle.
On a personal note for Schedule A Itemized Deductions, you may deduct 14 cents per mile for charity purposes and 12 cents per mile for moving or medical purposes.