[LearnerBug]

Hello All,

I am staying in Houston, Texas and now am posted on a project in Plano, Texas. My employer have allowed me to claim the per diem expenses for lodging and dining.So from IRS point of view if I claimed the maximum per diem amount (which is $153 for plano as per Pub 1542) do I have to keep all my bills and receipts? Is there by any way that the IRS will query me even though my per diem expense claim is in line with amount mentioned in Pub 1542?

Also, does my employer have to show that per diem amount on my W2?

Appreciate if you can advice me on above.

Thanks
LB

[AtlantaTaxExpert]

LB:

If you claim per diem, then you do NOT have to retain the receipts. That's the entire idea behind per diem.

Does your employer have to show the per diem as taxable wages on your W-2? Most likely yes, because using per diem is a non-accountable plan, which is taxable.

[LearnerBug]

Thanks for quick reply.

I am also trying to find if there is any limit on up to how many days in a year I can take per diem OR Is there any limit on the total amount of per diem one can get in a year?

The reason I am asking this is if I have to work on a project away from my taxable home address for the entire year then can I get per diem for that entire year.

Thanks in advance.

[AtlantaTaxExpert]

As long as you are away from your tax home, you can collect per diem.

The IRS may take the position that you have changed tax homes, but not if you left your family there.

[dparker77]

The company is telling us that we can only collect Per Diem for a max of one year, is this correct? I have heard different haven't been able to find confirmation.

[AtlantaTaxExpert]

You can collect per diem for more than a year, but once the year passes, the per diem becomes taxable income.