Okay... here we go.
PROBLEM #1
My husband works out of state and is paid per diem, I think anywhere around $60-$80 a day and is not required to keep receipts or anything like that.
On his W-2 for this company, they list one amount in the normal box 1 for the wages and such but in box 14 they list the per diem.
We do know that they taxed his per diem, so even though they separated the amounts, does he add the two together and use that as his 'actual' wages, tips, etc. amount to put on his federal return?

PROBLEM #2
We live in Illinois but he works in Iowa and I found out that the two states have this reciprocal agreement to where he doesn't have to pay Iowa taxes since he's a resident of Illinois.
My ? Is... the employer he works for is NOT an Iowa employer but based out of Minnesota but they took Iowa state taxes out... so, does the reciprocal agreement still hold true for him?
Plus, if it does... does he get the amount back from Iowa that was taken out of his check and then does Illinois eventually get ahold of him saying that he owes 'whatever' to Illinois in place of the Iowa?

This is really baffling me. I've done our taxes every year but these little 'read between the lines parts are really kind of weird.

Thank you to anyone that can help me out or at least point me in the right direction!

PROBLEM #1:

Report the figure listed in Box #1 as his wages.

The figure in Box #14 is provided to allow him to claim that amount as an employee business expense on Form 2106.

PROBLEM #2:

The reciprocal agreement may apply. However, he will need to file an Iowa tax return to get his withheld money back if that is the case. If not, any tax he pays to Iowa should be credited back to him when he files his Illinois tax return.

If you need professional help doing ANY of this, email me at [email protected].

Thank you for this information... I have another ? For you.
I have already looked at this form but is he required to itemize everything which it looks as though this is what the form is asking for or can he ONLY list the amount he received as the per diem and NOT list anything else?
I hope this makes sense!
Thank you once again!

If you claim per diem, you do NOT have to list all his itemized expenses.

That's the entire idea behind per diem: it allows you to claim a standard living expense for each day you are traveling and NOT have to keep track of your expenses.

Thank you once again... you truly are a savior!

Glad to help!

Download Form 1542 from Internal Revenue Service to make sure you are claiming the correct per diem amount.