Per Diem Income

Today TaxMama hears from Scot in Los Angeles who tells us, “I am working on a television show that is moving around the American north west. Our crew is receiving $40 a day each in per diems. Should this money be taxed? If yes, will members of the crew who don’t itemize lose money?”

Hi Scott,

Yes, this money gets shown on a line on your W-2.
And IRS looks for the income when they do their computer matching.

So, you’re right. Those folks who don’t track their expenses and itemize will be taxed without getting the benefit of offsetting deductions. Or they may hear from IRS for not reporting the income.

I suspect the per diem is only for meals and incidentals? The show is picking up lodging, right?

So, I’d suggest tracking the days each of you are out of town, and make note of the towns you’re in. You can use the IRS per diem rates for each city to report the meals expenses on your Form 2106
and deduct the reimbursements.

http://www.gsa.gov/Portal/gsa/ep/contentView.do?programId=9704&channelId=-15943&ooid=16365&contentId=17943&pageTypeId=8203&contentType=GSA_BASIC&programPage=%2Fep%2Fprogram%2FgsaBasic.jsp&P=MTT

That way, even if you can’t otherwise itemize, you’ll at least zero out this income and not end up paying tax on it.

And remember, you can find answers to all kinds of questions about per diems and all kinds of other tax issues, free. Where? Where else? At TaxMama.com

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