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Author: dapowell Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121144  
Subject: Can my LLC pay me per diem? Date: 2/19/2001 4:20 AM
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This is a repost.

This year I started a LLC in PA.
I am a Pa resident.
I spent almost all of my time traveling away from home.
Can I fill out an expense report and submit it to my company specifying the maximum amount as specified in form 1542?

http://www.irs.gov/prod/forms_pubs/pubs/p1542toc.htm

Thanks,
Dave
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Author: JFour Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 47062 of 121144
Subject: Re: Can my LLC pay me per diem? Date: 2/23/2001 7:19 PM
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This year I started a LLC in PA.
I am a Pa resident.
I spent almost all of my time traveling away from home.
Can I fill out an expense report and submit it to my company specifying the maximum amount as specified in form 1542?


dapowell

Prior to October 1, 2000 you were note allowed to use the per diem substantiation method for your travel expenses at all, due to the related party rule (ownership of greater than or equal to 10% of the payor).

After 10/01/2000, you are allowed to use the per diem method for meals and incidental expenses only (not lodging expenses).

See the Rev Proc 2000-9 for the rules from 1/1/2000 through 9/30/2000, and Rev Proc 2000-39 for after 10/01/2000. You may find these on the IRS website (sorry, I don't have that address handy to post here).

You must subtantiate your travel expenses by means of a log and by receipts; estimates are not allowed after 1984.

Sorry 'bout the bad news.

Jim

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Author: Helter Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 47074 of 121144
Subject: Re: Can my LLC pay me per diem? Date: 2/23/2001 10:01 PM
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JFour said:
Prior to October 1, 2000 you were note allowed to use the per diem substantiation method for your travel expenses at all, due to the related party rule (ownership of greater than or equal to 10% of the payor).

After 10/01/2000, you are allowed to use the per diem method for meals and incidental expenses only (not lodging expenses).

See the Rev Proc 2000-9 for the rules from 1/1/2000 through 9/30/2000, and Rev Proc 2000-39 for after 10/01/2000. You may find these on the IRS website (sorry, I don't have that address handy to post here).


Does this apply to an employee of an S-Corp that he owns as well? If so THANK YOU THANK YOU THANK YOU - I've been posting this question all over the place!

Helter
p.s. someone should tell varney!

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Author: JFour Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 47209 of 121144
Subject: Re: Can my LLC pay me per diem? Date: 2/26/2001 3:07 PM
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Helter

If you are a less than 10% shareholder of the S Corp, you are allowed to use the per diem substantiation rules for both meals and incidental expenses and lodging.

If you are a greater than 10% shareholder, the disallowance of the per diem method through 09/30/2000 applies. After 10/01/2000, meals and incidentals are allowed, lodging still requires other substantive proof.

What constitutes other substantive proof can be quite a lengthy discussion. In short, it requires a diary (the reason for the business trip) and the receipt (to substantiate the amount of the cost). A diary noting the cost and an ample sample of receipts (as in, you stay 10 times at the same hotel, and you have 3 or 4 receipts) with the costs being relatively the same for all 10 times would also suffice.

Hope this helps.

Jim

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