per diem

[Unregistered]

c corp; accountable plan; shareholder-employee get $25 per diem per day for going out of town. The actual meals expenses is higher than $25. Can the c corp deductable $25 or 50% of that amount?

[OldJack]

No

No it is not deductible as a shareholder-employee (related to your employer) cannot be paid under the per diem rules. See IRS publication 463, "travel, entertainment, gifts, and car expenses", page 28. The shareholder/employee must account for actual expenses with documents. Expenses paid under the per diem rate must be reported as taxable income to the shareholder (W2 gross) and he then may take employee business expense deduction (form 2106) subject to 2% adj gross income test on 1040 Sch-A.