Does Per Deim (money for gas and food or expenses) given to the employee be reported on your taxes. If so does it affect you meaning, will you be charged taxes on it or is it tax free.
2007-02-09 08:50:45 · 4 answers · asked by oreo29 2 in Business & Finance ➔ Taxes ➔ United States
Per Diems are not taxable unless they are in excess of the IRS tables. If you think about it, you are using after tax money to pay for business expenses, that is why the IRS does not consider this to be taxable. If they did, you would be taxed on the Per Diem twice. Once when you receive your paycheck, and again when you use it to purchase the Meals while out of town for example.
If you did exceed the allowable amount under the IRS tables, the employer would be required to include this amount in your W-2.
Now with that said, the expenses associated with the Per Diem's or expense reimbursements are not deductible either. So they don't help you, but they don't hurt you.
2007-02-09 09:35:25 · answer #1 · answered by Lip Service 2 · 1⤊ 0⤋
Per Diem would need to be considered income, but if you actually spent the money while away on company business, you could deduct the expense, so you'd be even.
Often the per diem is not reported by your employer to the IRS, so it often makes more sense not to report it since most people spend it during their business trip and it it wouldn't effect your taxes anyway.
2007-02-09 16:56:42 · answer #2 · answered by John L 5 · 0⤊ 2⤋
Yes, you need to report the income but you can also deduct the expense for which you were reimbursed.
2007-02-09 16:54:55 · answer #3 · answered by John G 4 · 0⤊ 1⤋
i would do it!
2007-02-09 16:53:29 · answer #4 · answered by Anonymous · 0⤊ 1⤋