Per Diem and taxes

[canadflyau]

How did your employer report your Per-Diem on your W-2?

Do they report it in box 12?

 

[Q200_FO]

affirm, box 12a

 

[Long Time Gone]

A couple of things.....

First of all, not all employers will report this in box 12; some report it combined with everything else in box 1 (whether it was taxed or not, it doesn't matter). If this is true with yours, it does NOT count as reimbursalbe expenses. You were not compensated according to the IRS.

Also, remember that you meet the requirements of the DOT for service workers. In a nutshell, you can claim 65% of your meal expenses (actual or allowance) instead of only 50% like Joe the Smoe travelling Amway salesperson.

Enjoy,
LTG

 

[Blue Dude]

Many times employers will not break out your per diem on W-2 line 12, but will only include it without comment on line 1. This only applies to taxable per diem, i.e. per diem that you were paid without a rest period out-of-base (day turns). Any trips that you flew that involved a rest period out-of-base (2 or more day trip) will be non-taxable, will not be included on your W-2 line 1, and is considered reimbursement when you file your form 2106 - employee business expenses. What happens there is you figure your expense allowance (either standard or actual, your choice) on line 5B then subtract your nontaxable per diem figure, line 7B. The difference (line 8B) is then multiplied by 65% (line 9B), as you are a "DOT" employee for this purpose. That new product is figured into your 2106 total deductions (line 10), which is itself lumped together with your other "2%" deductible expenses on schedule A, line 20.

If your domestic per diem is less than about $1.60 per hour, it's worth going through all this, but if it's more than that, your per diem reimbursement is usually more than the IRS allowance, and therefore not deductible. Your call on whether to figure that part of form 2106, but I gave up on it years ago (our per diem is $1.80 an hour). International per diem is something else again, so unless your company is exceedingly generous, file that sucker by all means. Check here for the official per diem allowances. Good luck!