My company has not taxed my per diem for the last 10 months. I was just told that after one year on this jobsite, which is out of town, I will be taxed on my per diem. Can that happen?

Yes , they can do that - in fact they must do that, due to IRS regulations. Tax-free per-diem is only for temporary jobs, meaning job assignments that are less than a year duration, or are reasonably expected to be less than a year. If your original out-of-town assignment was expected to be less than a year, but has been extended due to unforeseen circumstance, you may be able to argue that the per-diem should continue to be tax-free.

Thanks - Not the answer I was hoping for…. So you get hit with tax twice on the same dollar? Example: When I pay the power bill tax has been added on. Now I have to pay the same power bill that has that same tax added on with expense money that has already been taxed. Can you tell me if I can turn in my receipt on my taxes next your if I spend more then I receive after taxes?

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Originally Posted by KHBurgess

Thanks - Example: When I pay the power bill tax has been added on. Now I have to pay the same power bill that has that same tax added on with expense money that has already been taxed.

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That's what income tax is all about - the government taxes you on income (and per diem is income after the first year), and then you have to pay sales tax, excise tax, or whatever with your after-tax dollars. That's the way it works for all of us.

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Originally Posted by KHBurgess

Can you tell me if I can turn in my receipt on my taxes next your if I spend more then I receive after taxes?

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If you have legitimate unreimbursed business expenses you can deduct them. But living expenses after the first year are not considered business expenses, any more than your food or electric bill is at home.