per diem tax help

[nimtz]

I am one dense blond when it comes to tax law so hopefully someone can help me out. I trying to figure out the deduction I can take for per diem and I just want to make sure I get it right. I planning to itemize with every city I overnighted in. So just to make sure I got this right I take the difference from the gov. rate for that city and apply that to the deduction. Can somebody explain to me what the nationwide rate is for per diem if it your in a city not listed on Form 463? I've heard everything from 30 bucks to 40 bucks. Also what is the standard deduction you can take? Thanks for the help in advance, like I said I would rather eat sand then read tax law...

 

[OviedoBob]

Pub 463 describes the DOT $38/domestic and $42/int'l rates to take for cities. Also www.policyworks.gov/perdiem lists the actual per diem rates for individual cities if you want to use each city.

The special DOT rules apply to professional pilots (airline, corporate, charter, etc) and is described in PUB 463 which can be downloaded for from from www.irs.gov.

For example: you RON 100 domestic nights in 2002, and 100 nights int'l. Multiply 100 X $38= $3800. Multiply 100 X $42= $4200. The total of $8000 is your expense for your traveling.

You would also list the overnight per diem you received for these 200 nights. These numbers would be listed on Form 2106.

($8000 - Per Diem received) X 65% is the DOT deduction you could get on Form 2106 that would transfer to Sch A on your itemized deductions. Don't forget to include uniform expenses,
shoes, etc as un-reimbursed expenses.

These expenses would only show up on Sch A if they exceed 2% of your adjusted gross income. If your AGI is 100k, expenses that exceed $2000 would be able to transfer to Sch A. In other words, you cannot deduct the first 2% of your employee expenses.

One of the better books to get is Ernst & Young Tax Guide 2003, at your book store.