[stringfish]

My wife travels with her job. In the past the per diem that she receives to pay her rent and living expenses has never been taxed.

Now a new accountant says they have to start taxing these funds. This doesn't seem right. Got an answer ?

[MukatA]

It depends upon how does the employer reports the amount. If it is included in box 1 of W2, then it is your taxable income. You then claim job related expenses on schedule A (Form 1040).

[AtlantaTaxExpert]

In general, if your wife is under an ACCOUNTABLE plan where she submits an expense report and gets reimbursed for those expenses as reflected on the expense report, then the reimbursement is NOT taxable.

However, if she just gets a set amount every day regardless of whether she spends it or not, then the per diem (which is Latin for per day) reimbursement IS subject to income taxes, which she can partially offset by claiming her expenses on Form 2106 as an itemized expense.