Top 10 MYOB Alternatives

tenalternatives.net writes:  MYOB - Australia's Number 1 provider of Accounting software, Bookkeeping software, Payroll & Retail solutions for small to medium businesses & accounting practices. Mind Your Own Business. Smarter. MYOB is Commercial application which compatible with Windows. We have searched on the web for the most suitable alternatives of MYOB. Here are the top applications which have same functionality with MYOB

Top 10 MYOB Alternatives :

                             

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You're about to find the most suitable MYOB alternatives. We have collect some data on the web to provide a useful information for you to consider the best MYOB alternatives.

You Need A Budget

Personal home budget software built with Four Simple Rules to help you quickly gain control of your money, get out of debt, and reach your financial goals! You Need A Budget is Commercial MYOB alternative which compatible with Mac OS X, Windows, Android, iPhone.

CalendarBudget

The easiest way to track and forecast your wealth - using a calendar. Put all of your income and expenses on a calendar so its easy to see your daily balances, when bills are coming out, get reminders and see... CalendarBudget is Free MYOB alternative which compatible with Online, Android, iPhone, Android Tablet.

Intuit Quicken

Quicken is Americas #1 personal finance software. Make money management easy. Take control of your personal finances. Quicken makes it easy to manage your spending, stay on top of day-to-day finances, and... Intuit Quicken is Commercial MYOB alternative which compatible with Mac OS X, Windows.

Manager

Manager is free accounting software for Windows, Mac and Linux. It features an intuitive and innovative user interface with modules such as cashbook, invoicing, receivables, payables, taxes and... Manager is Free MYOB alternative which compatible with Mac OS X, Windows, Linux.

Gazelle Point-of-Sale

Gazelle Point-of-Sale is an advanced web-based Point-of-Sale, inventory, customer and staff management system aimed to meet the needs of small and medium enterprises. It boasts innovations such as mobile... Gazelle Point-of-Sale is Free with limited functionality MYOB alternative which compatible with Mac OS X, Windows, Linux, Online, iPhone, Chrome OS, Android Tablet, iPad.

QuickBooks

The most popular version of Americas #1 small business financial software helps make your business more profitable. New features show you exactly where your business stands and saves you time to focus on your... QuickBooks is Commercial MYOB alternative which compatible with Mac OS X, Windows.

ERPLY Point Of Sale

ERPLY.com is a web based affordable point of sale software and inventory system. Small business management software made easy. Free 30 day trial! ERPLY is a vital tool for managing your retail... ERPLY Point Of Sale is Commercial MYOB alternative which compatible with Online, iPad.

Outright.com

Free Online Accounting Software - Track business with free, online bookkeeping & accounting software - Automatically track sales & income, expenses & deductions, mileage, contractors & W-9s,... Outright.com is Free MYOB alternative which compatible with Online.

Kashoo

Kashoo is REAL accounting software made simple. Perfect for Small Business, Freelancers and Home Businesses. Kashoo is Commercial MYOB alternative which compatible with Online.

Pocketsmith

Create a budget by forecasting on a calendar. Pocketsmith is Free with limited functionality MYOB alternative which compatible with Online.

We also provide comparison charts for consideration to determine which one is best for you.

Google trends graphs below can also be your consideration to determine the popularity of each alternative. Please see the following graphs from google trends to determine the top MYOB alternatives.

The above data we collect from various sources which very accurate. I hope the above information can help you to choose the best MYOB alternatives.

Taxpayers Should Act Now to Take Advantage of IRS Changes

Rick Rogers for the Washington Informer writes:  Unlike last year, tax planning for 2013 is not hampered by uncertainties over a looming fiscal cliff. Unfortunately, there is always some uncertainty and a few expiring provisions to warrant special attention by taxpayers.

Managing income taxes at year end involves techniques designed to address three issues:

• Accelerating or deferring income: If a taxpayer expects to be in the same or a lower tax bracket next year, it's best to defer as much income as possible until after year's end.

• Accelerating or deferring deductions: If a taxpayer's overall tax rate is the same in both years, accelerating deductions achieves tax savings this year rather than waiting for those tax savings to materialize next year.

• Take advantage of tax provisions scheduled to expire at the end of 2013. There are several temporary tax provisions which can only be used this year.

Tax planning begins by projecting income and deductions for the year to determine your tax bracket and income thresholds that trigger higher and/or additional taxes, or limits the effectiveness of deductions. One of the impacts of the American Taxpayer Relief Act of 2012 (ATRA12)is the reintroduction of the Pease limitation, which can greatly limit itemized deductions. Once a taxpayer knows what his or her income taxes will look like, it’s time to evaluate which techniques will help the most.

Strategies to accelerate or defer income:

• Adjust your elective deferral plans at work: Taxpayers who participate in 401(k), 403(b), most 457 plans, or in the Thrift Savings Plan can defer up to $17,500 this year. Taxpayers age 50 and older can defer up to $23,000.

• Harvest capital gains or losses: Long-term capital gains are taxed at 0 percent for taxpayers in the 15 percent bracket. Capital losses can be used to offset capital gains and reduce other income up to $3,000.

• Use the IRA. Taxpayers age 59½ and older can accelerate IRA distributions in 2013. Contributions may be deductible depending on your income level and whether you’re covered by a retirement plan through work. Taxpayers under age 59½ can convert traditional IRAs to Roth IRAs to accelerate income.

• Health-care assistance: People with health savings accounts — available with some high-deductible health insurance policies — can save up to $3,250 tax-deferred for an individual and $6,450 for a family.Those who are55 and older can save an additional $1,000. Flex spending contribution limits are capped at $2,500 this year.

Strategies to accelerate or defer deductions:

• Medical expenses: The Affordable Care Act (ACA) raises the income threshold this year to 10 percent of adjusted gross income for taxpayers under age 65. The threshold remains at 7.5 percent for those 65 and older. Taxpayers may need to prepare or defer medical bills to lump expenses in a single year to get the deduction.

• Gifts to charities: Use a donor advised fund (DAF) to maximize the tax savings from charitable giving. A DAF makes gifting appreciated securities easier. The DAF can be funded in tax years when the deduction will have the most impact. Distribution to charities can be made at any time without tax consideration.

• Qualified Charitable Distribution: This year only, taxpayers age 70½ or older can choose to direct up to $100,000 of their IRA-required minimum distribution to charity. By doing so, the distribution does not show up as taxable income, which can lower taxation of Social Security benefits and help reduce other threshold levels to further minimize taxes.

ATRA12 extended — but did not make permanent — several tax incentives for individuals. Taxpayers should consider whether they can benefit from these incentives this year and plan accordingly. The following provisions are set to expire on Dec. 31 unless extended again:

• State and local sales taxes deduction. Taxpayer can choose between deducting state and local income taxes or the sales taxes they’ve paid through the year.

• Deduction for teacher expenses. Eligible educators can deduct up to $250 of any un-reimbursed expenses.

• Deduction of mortgage insurance premiums. Payments of Private Mortgage Insurance premiums can be treated as deductible home mortgage interest in 2013.

• Discharge of principal residence indebtedness. This can be excluded from gross income this year.

• Qualified Charitable Distribution. Taxpayers can make tax-free charitable donations from their required IRA distributions.

2013 is certainly an exciting year for tax planning. Start now in order to minimize your tax bill in April.

Experts: Tax software not foolproof

Matt Chandler for the Buffalo Law Journal writes:  Turbo Tax, H&R Block at Home, TaxACT.

The market has been flooded in recent years with an ever-improving number of do-it-yourself tax software packages. Each promises an efficient, effective and, most important, inexpensive way for individuals to complete the annual drudgery of filing taxes.

What might have cost $100 or more to have an accountant prepare a basic tax return can now be accomplished for as little as $39.99 with one of the plethora of tax packages readily available. Due in part to challenging economic times, however, more people are looking to save a buck by doing their own taxes, and the trend is no longer limited to individuals and families.

In 2012, more than 30 percent of Americans used at-home software to complete tax returns. Among that group were small-business owners. Though they typically have a more complex tax situation, some opted to go it alone. But experts warn about the pitfalls of bypassing your CPA in favor of your home computer.

Deborah Weber is a tax attorney and partner in the Buffalo law firm of Andreozzi Bluestein Weber & Brown LLP. She said some small-business owners are “penny wise and pound foolish” because they don’t understand all of the complexities in the U.S. tax code. Relying too much on a software package could land them in trouble.

“Say you are itemizing your business deductions and you have a neighbor or colleague who told you that you can deduct your country club dues,” Weber said. “The software is just going to take the numbers that you put in, where a tax professional would catch that and tell you that isn’t deductible.”

Not properly understanding tax-deduction rules is one of the biggest pitfalls for business owners who decide to file taxes on their own, she said, and although making improper deductions may get you in trouble with the IRS, it is an issue that goes both ways.

“Tax professionals are trained to listen to you and ask certain questions to make sure you are taking all of the deductions you are entitled to,” she said. “So a small-business owner doing it themselves may not think of all of those things and cost themselves money, as well.”

You get what you pay for, she added.

“CPAs and return preparers are trained and they go to school for a reason,” she said. “They have knowledge that the average person doesn’t have.”

That knowledge could mean the difference between sailing through tax season or ending up sitting across the table from an IRS auditor.

“You might be saving a few bucks if you pay, say, $75 for TurboTax and it might have cost you $250 to do your return,” she said. “But when you get audited and they disallow a ton, on top of additional taxes, penalties and interest, you are going to wish you paid the extra money.”

Tim Sawers, meanwhile, is a tax attorney with Hodgson Russ LLP who has a different view. He said he sees advantages to using at-home tax software — Sawers himself uses it to file his personal income taxes.

“Generally, it is a big improvement for people who have always done their own,” he said. “It does things automatically and it eliminates a lot of calculations. The law itself has become so complicated that it has become easier to just follow a computer program than it is to do it by hand, even for someone who knows the laws.”

He acknowledged, however, that the software certainly isn’t everyone.

“Unless you are running a really simple business — no inventory or employees, just a business you run in your own name — there are just too many complexities,” Sawers said. “I think you need to have a sophisticated practitioner handling your return.”

Like Weber, he said despite the many advances in tax software, the cost of hiring a professional may be money well spent in terms of peace of mind for small-business owners.

“I have seen even fairly simple returns fouled up, especially when using some of these online programs,” he said.

And when mistakes are made, he and other tax professionals say, a business owner doesn’t want to have to go up against the IRS.

Despite reports that the federal agency had softened its tactics in recent years following highly publicized reports of overly aggressive collection tactics, not much has changed, Sawers said.

“I do not believe the IRS has changed its stripes,” he said. “They can be very heavy-handed. Once in a while you might see a grace note from the IRS, but generally, they are as heavy-handed as they ever were.”

Mark Tronconi, a principal with Tronconi Segarra & Associates CPAs in Williamsville, said his office gets the call when do-it-yourselfers get in a jam.

“All the time — we handle those cases regularly,” he said. “What happens is the business owners starts to do their taxes and then realizes, ‘This is beyond my skill set. I don’t know where to go with this.’ And that’s when they reach out to us.”

Tronconi said another challenge for both individuals and business owners is a failure to do adequate tax planning throughout the year.

“I can’t tell you how many people come to us in January, February, March asking, ‘What can I do in terms of tax planning?’ We have to tell them, basically, it’s too late,” he said.

When a small business works with a tax professional, there are plans to manage receipts, think ahead on deductions and strategize on purchases and sales of equipment — all aimed at minimizing tax liability.

Experts say that those are all elements of the process that tend to get lost in the software.

CPAs and business owners also tend to create a team approach to their taxes, putting themselves in a stronger overall position.

“We can talk to your insurance person, your investment adviser, your attorney,” Tronconi said.

“The more people you have involved, the better off you are. But like anyone else, we can’t help if we aren’t involved and don’t know what you’re doing.”

Change of domicile can be taxing

Stephen Williams for MarketWatch writes: Traveling for the winter or permanently moving to warmer climates is a common decision for many retirees, especially when putting into consideration the advantage of southern tourism states with lower income taxes.

Increasing interest in changing domicile — the location of a person's fixed, principal and permanent home — to select the best state for tax purposes is becoming increasingly popular. This trend began to accelerate about 10 years ago with the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001, or EGTRRA, and the real estate bubble that occurred during that time.

When EGTRRA increased the estate tax exemption amount to $1,000,000 and scheduled subsequent increases in estate tax exemption through 2010, the state death tax credit was replaced with a state tax deduction to help pay for that change. As a result, some states saw their state estate tax phased out, while other states saw death taxes continue. This left the U.S. with some states with no state death taxes and others which impose a state estate or inheritance tax.

In the early 2000s, Florida took on heightened domicile interest. In addition to the attraction of moving to a warmer state with rapidly appreciating real estate values, effective Jan. 1, 1995, Florida amended its laws to impose a cap on increases in the assessed value of property that was used as a primary residence. The Florida Save Our Homes property tax amendment imposed a 3% cap on property appreciation assessments. When the real estate bubble caused an annual increase in home property values ranging from 8% to 27%, Florida real estate tax bills for similar properties varied significantly based on whether the 3% cap applied.

Let's take a closer look at domicile, the tax and estate planning consequences of a change in domicile, and recommended steps for making a change following consultation with one's tax, financial and legal advisers.

What is domicile?

Domicile is the location of a person's fixed, principal and permanent home and is the place to which that person intends to return and remain even though currently residing elsewhere. Domicile is different than residency. While a person can have multiple residences, a person can only have one domicile. A person can reside in one state, but still be considered domiciled in another state to which the person intends to return. Once domicile is established in a particular state, it is presumed to continue until a person can show that a change in domicile has occurred.

States, especially the taxing authority of each state, will look at a number of factors to determine domicile. The factors considered will differ state to state and while no one factor is determinative, relevant factors include:

• Physical presence (amount of time spent in the state)
• Residence (whether a person owns or rents a home in the state)
• Employment
• Family location
• Real property ownership
• Voting registration and actual voting
• Driver's license
• Automobile registration and location of most valuable cars
• Bank accounts
• Tax return filings
• Memberships and licenses
• Professional services (doctor, dentist, lawyer, accountant)
• Location of valuables
• Cemetery plots (yes, even those.)

Termination of domicile may involve documenting and communicating the change in domicile to the appropriate taxing authorities. This can sometimes be more difficult to prove than establishment of domicile.

Why is domicile important?

Property ownership rules are governed by domicile. Laws of the state in which you are domiciled will determine a person's right to retain property and the rights of others to make a claim on your property. States may also impose taxes on a person domiciled in their state. From a planning perspective, taxes are probably the most important factor when considering the selection of your domicile. Asset protection and the rights of a spouse in the event of divorce may also be important considerations.

Tax laws apply depending on your place of domicile. The impact of the law will change depending on a person's amount of income, type of income, size of estate and value of the person's home. The following four tax planning points are important to consider when selecting your domicile.

1. Income taxes

Selecting domicile in a state that imposes no income tax can be an effective tax reduction technique. However, a state can tax a nonresident on income that is earned in that state. This includes compensation earned in that particular state (wages, salary, deferred income, Subchapter S income and income from a partnership or LLC) and income earned from a state source (such as rental income or capital gains on real estate located in a particular state). If you continue to work in a particular state, but change your domicile to another state with no state income tax, you won't necessarily save income tax on your earned income.

2. State death taxes

Planning to minimize state death tax is simple. Except for real property that is located in another state, you avoid a state estate or inheritance tax if you change your domicile to a state that doesn't impose a state death tax. States that do impose an estate or inheritance tax will generally impose the tax upon the death of a person domiciled in that state or upon the death of a nonresident who owns real property located within that state.

Most states give their residents a small tax break if a home is used as a principal residence. Typically, the relief is in the form of a reduction in the assessed value of the home or a credit against the property tax amount. If you decide to change your domicile, it will be important to notify your current property tax assessor that you have moved and are no longer eligible for any homeowner tax relief.

Florida offers the most significant property tax relief to persons domiciled in that state. The $50,000 homestead exemption and 3% cap on property appreciation are important tax planning benefits.

4. Fiduciary income taxes

Fiduciary income taxes — taxes imposed on irrevocable trusts — apply in states that impose a state income tax at rates similar to the individual state income-tax rates. Fiduciary income taxes often apply to irrevocable trusts that become irrevocable when the creator of the trust (the "settlor") is domiciled in the state. Frequently, the event that causes the trust to become irrevocable is the death of the settlor. Thus to avoid fiduciary state income taxes, you are advised to change your domicile to a state without fiduciary income taxes before your trust becomes irrevocable. [Note: Some states do impose a fiduciary income tax on irrevocable trusts that are administered in that state.]

Changing Your Domicile

Depending upon the state from which you are moving, the state department of revenue will likely scrutinize your move to the highest degree. Many states are beefing up their department of revenue staff to monitor changes in domicile.

It is recommended to work closely with your tax and financial advisers and legal counsel to consider all ramifications of a change in domicile and, if warranted, take the necessary steps and precautions that will ensure a smooth transition. Remember these considerations:

• Every state employs its own set of factors to establish new domicile or terminate an existing domicile.
• Termination of domicile is often more difficult to prove than establishing a new domicile.
• It falls on the taxpayer to "prove" that domicile has, in fact, changed.

Conclusion

As you can see, changing your domicile is complex, especially if you retain a home in multiple states. There is no magic rule to prove a change in your domicile. However, a change in domicile can significantly benefit your financial and estate plan.

Please consult with your financial adviser, lawyer and tax preparer to determine whether such a move is right for you.

Sage upgrades online accounting software / Sage upgrades online accounting software with launch Sage One Accounts Extra

From the U.K. we read  Richard Crump & Rachael Singh for Financial Director write:  Sage One Accounts Extra, The updated software includes new reporting and cashflow forecasting tools, more sophisticated controls for automated bank reconciliations and upgraded international trading capabilities. These upgrades will allow users to record transactions in multiple currencies, calculate exchange values and VAT transactions with non-UK based businesses.

The FTSE 100 company launched Sage One in January 2011. However, at the time it was revealed by Accountancy Age that Sage's traditional on-premise software could not be transferred to the new system automatically and would need to be done manually. A spokesperson at the time said the company was working on changing that in the future. 

Sage One Accounts Extra can now receive exported data from the on-premise software, although it cannot be sent "en-masse" and must be done in sections. A Sage spokeswoman told Accountancy Age that functionality to export the data will be "definetly" follow although they are unable to give any time-frame. 

This new Sage One Accounts Extra allows users to upload contacts and other data so that it does not have to be done manually.

According to Sage, the new software will give more accessibility and control to users by controlling who can manage payments and receipts and provide a clear, real-time view of payroll, cash flow, profits, balance sheets and projections.

"Sage One Accounts Extra has been designed to give our users more power and control across the board; which in turn gives them the freedom, confidence, and peace of mind to focus on growing their business," said Simon Hodgkins, head of Sage One UK and Ireland.

The Sage Cashbook costs £5 per month; Accounts £10 per month; with the Accountant Edition Extra, free to Sage Accountants' Club members, with non-members having to pay £25+VAT. 

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Why Xero doesn't work for my small business...

Paul Horner at Xero Business Community has a problem, he writes: Having spent a lot of time getting to know how to use Xero (and in the most part, liking it), I am approaching the 6 month mark with the software and unfortunately there is one issue which makes me wonder if i can continue with it. 

The issue is with 'usual payment' types to my suppliers. We pay some suppliers by electronic bank transfer (BACS), others are taken automatically by direct debit / standing order etc.

The problem is that Xero has no way of linking this to the contact, so every time I come to pay a bill, I have to remember whether or not it is direct debit etc. I have already mistakenly paid bills by BACS which were then subsequently taken by direct debit. Xero does not handle this well at all.

This info needs to be tied to the contact and displayed when creating a bill and also a column for it shown in the Bills>Awaiting Payment screen.

My current get around is to put the info at the end of the reference field in the bill e.g.

<bill no.> D/D

…but again it relies on memory to know who is paid by what method as it is not always shown on the bill.

I know other people copy previous bills and handle it that way but I find that very tedious. 

It's a very simple issue and a very simple fix for Xero, but with all the change requests they get I doubt very much whether it will ever get implemented. I did submit it as a request myself but there are so many that it soon disappears off the page and goes unnoticed.

I so wish they would sort this. I would have thought it's no more than a minor tweak to add this as a database field. I don't know if they have a 'development matrix' where they take ease of implementation into consideration against no. of votes etc. But if they don’t, they should!

It's really ruining a great piece of software for me.
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Visit Xero Community Blog here to join this discussion...

How Inuit plans to helps Small & Medium Enterprises in India

B PRADEEP NAIR, for TNN writes:  The only data-management solution a small or medium enterprise typically invests in is an accounting software like Tally. To manage the rest of the functions, like inventories and stock supplies, the manager relies on his goodold ledger, files and notebooks. Nothing wrong with them, except it's hard to handle the growing volume of transactions and the diverse types of data. 

That, in turn, limits his ability to diversify and grow in business. Sharath ChanderPunthambekar, a 59-year-old veteran in implementing ERP (enterprise resource planning) solutions in India and abroad, saw this as an opportunity and set out to build a platform that would put the small businessmen on a par with their resource-rich counterparts, as far as IT infrastructure is concerned. 

"Most of the companies, especially at the bottom of the pyramid, don't have the technological, infrastructural or cultural bandwidth to implement a true ERP solution. Some go in for one, because their competitor has one," says Punthambekar. "And, many of them can't afford a solution like SAP." 

With the aim of giving the power of IT to the millions of SMEs and thereby revolutionize the way they do business, he and his friend of over three decades, M H Narasimhan, 63, have joined hands to put together Inuit. 

"Our platform is based on three critical premises: simplicity, affordability and speed. "We offer SMEs the 5-12-5 advantage: cost of Rs 5 per day per user, 12 key modules like orders, bills, receipts, purchases, payments, deliveries, etc; and the app is up and running in 5 days. There are no licence fees, no implementation fees, no customization fees, no maintenance fees, no version upgrade fees and no consultant fees," says Punthambekar, CTO of Inuit Cloud Technologies. 

Narasimhan, who is the CEO, adds, "For any businessman, there are just three matrices: receivables, collections and stock turnover ratio. And we have just focussed on them." 

Narasimhan, who is the primary investor in this initiative, has over 30 years of experience in senior management, strategy, sales and marketing. Narasimhan says, "SMEs are the backbone of our economy but the most neglected. They have poor quality of information. Even large companies , who have tried to slice ERP solutions, haven't been able to do it in a simple manner. So, we decided to make available a simple information management app to the SMEs who have neither great knowledge of IT nor resources to manage an IT team. It's mobile, and you can upload and download data wherever you have internet connection ." 

Inuit, to be launched on November 1 in Bangalore, won the gold medal from the government of India's department of science & technology and Lockheed Martin, USA, for the Best Innovation on the Cloud. Punthambekar is one of the 30 Indians to have won the annual gold medal. 

A recent study by Ficci and Google showed that barely 5% of SMEs had even a website. The founders of Inuit are gungho about the change the platform can bring. The company already has around 400 installations in the pipeline. "There are roughly 18 to 20 million SMEs in India that contribute around 40% of the country's GDP. An app like Inuit can help them manage their business better, increase productivity and diversify. When they grow, so too will the GDP," they say.

Xero brings Files to online accounting

Xero has today dramatically improved accounting software for small businesses with the launch of Files. The Files feature within Xero resolves the fundamental issue of financial documents being in a different place to the relevant data. Rather than sitting in filing cabinets, financial documents and images can now live seamlessly next to transactions, where they always belonged.

“The collaborative benefits of Files are only possible in online software, “in the cloud”. As Xero closes in on completing its full accounting platform for small business, desktop software is becoming obsolete,” says Xero CEO Rod Drury.

Xero now allows customers to fully manage both financial data and financial documents in the same system. This ushers in new efficiencies and opportunities for small businesses and their accountants to work together.

“It seemed crazy to us that financial transactions are on a computer screen but copies of the source documents are spread all over the place in binders, filing cabinets and shoe boxes,” says Drury. “Finally all financial information is in the one place. It just feels like this is how it should have always been.”

Files is not only about financial documents. Contracts, company incorporation documents, board minutes and warranties can be all shared between the business owner, accountants, bookkeepers and directors all in the one place.

Files fundamentally changes the way small businesses, accountants and bookkeepers can work together. The small business owner can upload source documents as they are received or generated, making reporting and tax time much more efficient and less hassle for everyone.

Accountants and bookkeepers will find Files reduces document handling, printing, and cuts down hours hunting for source documents that could be anywhere. Auditors will benefit from documents being on hand. This will especially help non-profit organisations, who could save hundreds of dollars in audit fees annually.

Files are stored in a system with world class security and reliability. They are fully encrypted and geographically replicated – stored in multiple locations so they are available anywhere, at anytime.

This video provides an overview of Files and can also be used by video media.

Simplified Per Diem Rates Increase for Post-September 30 Travel

The IRS has announced the simplified per diem rates that taxpayers can use to reimburse employees for expenses incurred during travel after September 30, 2013 (Notice 2013-65, 2013-42 IRB __). The high-cost area per diem increases from $242 to $251 and the low-cost area per diem increases from $163 to $170, the agency reported.

Comment

For employers, the key difference between the per diem rates and the general expense method is substantiation, Tim Ellenwood, Director, State and Local Tax Group, McGladrey, Vienna, Va., told CCH. Travel expenses are deemed substantiated as long as amounts paid or reimbursed are at or below the federal per diem rate; thus, an employee does not need a receipt or other substantiation, Ellenwood explained.

In August 2012, the General Services Administration (GSA) announced that the 2013 per diem rates for travel within the continental United States (CONUS) by federal government employees on official business would be unchanged from 2012. At that time, the GSA explained that the rates were frozen in response to a White House directive requiring federal agencies to reduce their travel expenses by 30 percent.

The per diem amounts approved by the IRS generally track the GSA rates. In September 2012, the IRS announced per diem rates for 2013. Like the GSA rates, the 2013 per diem rates set by the IRS were unchanged from 2012.

On August 30, 2013, GSA released the 2014 per diem rates for travel within CONUS by federal government employees on official business. GSA announced that the 2014 per diem rates would increase from the 2013 amounts.

The IRS provides optional per diem allowances, in lieu of substantiating actual travel-related meal and lodging costs, which employers and employees are deemed to have substantiated by adequate records or other sufficient evidence. The per diem amounts also satisfy the requirement that employees provide an adequate accounting to the employer of meal and lodging expenses.

In Rev. Proc. 2011-47, 2011-42 IRB 520, the IRS explained that, going forward, it would not revise the annual revenue procedure that provides rules for using a per diem rate to substantiate the amount of an employee’s expenses for lodging, meal and incidental expenses, or for meal and incidental expenses only, that a payor reimburses. Instead, the IRS would publish, as it has this year, an annual notice providing the special per diem rates and the list of high-cost localities. Taxpayers using the rates in Notice 2013-65 must comply with the rules in Rev. Proc. 2011-47, including the transition rules for per diem use in the current year’s fourth calendar quarter.

The IRS-approved per diem rate for high-cost areas is $251 ($186 for lodging and $65 for meals and incidental expenses). The IRS-approved per diem rate for all other areas is $170 ($118 for lodging and $52 for meals and incidental expenses). The rates apply to per diem allowances paid for travel after September 30, 2013.

The IRS explained in Rev. Proc. 2011-47 that the term “incidental expenses” has the same meaning as in the federal travel regulations. Federal travel regulations issued by GSA in 2011 describe incidental expenses as fees and tips given to porters, baggage carriers, bellhops, hotel maids, and stewards or stewardesses and others on ships. Transportation between places of lodging or business and places where meals are taken and the mailing cost associated with filing travel vouchers and payment of employer-sponsored charge card billings are excluded from the GSA definition of incidental expenses.

Comment

As a result of the revised GSA regulations, taxpayers using per diem rates may separately deduct or be reimbursed for transportation and mailing expenses, the IRS explained.

Comment

The rate for the incidental expenses only deduction is $5 per day for post-September 30, 2013 travel.

Reference: PTE §10,125.10