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wackyc · May 6, 2010, 03:38 PM

Ok I work road construction and my employer gives us housing pay if we stay at a motel/hotel. It's only $35 a day, but better than nothing I guess. The question I have with it is that it's just added in a lump sum and taxed along with my regular wages. So I have to pay all the taxes out of of it and get taxed when I get a room. Is there any form or something I need to fill out for it, or is it supposed to be considered income and taxed as such? And there is no mention of it on my w-2 as misc untaxable, like per diem is supposed to be. Is this right or is it OK because it isn't titled or labeled as per diem on my pay stub? Thanks for any help :)

AtlantaTaxExpert · May 7, 2010, 08:27 AM

If your employer treats it as income, you can deduct the cost of the room as an employee business expense, which is an itemized deduction using Schedule A and Form 2106.

You may want to mention to your boss that he can categorize the housing pay as an untaxable fringe benefit, but I doubt that he will listen.

wackyc · May 7, 2010, 05:24 PM

So I can take the entire room expense off, or only what is not covered by the $35 housing pay? And no he won't change how it's categorized, for some reason. Thanks for the reply

AtlantaTaxExpert · May 10, 2010, 01:09 PM

You can deduct your actual cost for the room, be it $5 or $150 dollars.

Be sure to keep the receipts. Lodging costs are ONE cost that the IRS does check on.