My job extended past the 12 month period. My per diem was non taxable for 4 months of 2008 and taxable for the remaining 8 months. I am still on this project with perdiem being taxed and should complete assignment end of April 2009. How do I file my taxes. I usually use the government allowed rate for the area when I work away but not sure what I can claim or how to do it with part taxed.

This is itemized deduction taken on Schedule A (Form 1040). You will also complete Form 2106. Unreimbursed Employee Business Expenses.

You will take deduction only if your itemized deductions are more than your standard deduction.. You can deduct the expenses that are more than 2% of your adjusted gross income (Form 1040, line 38). Read: Your U.S. Tax Return: Itemized Deductions