Career Path > Tax Q&A
Department of Labor and Per Diem Payments - The IRS continues its audits
traveltax:
--- Quote from: BetaAnt on Jul 16, 2014, 10:44 ---If your employer states the project is greater than 12 months, per diem is taxable? What happens if the project crashes before the 12 months? Refund of taxes paid?
If your employer has a short term project that suddenly expands, do you owe taxes on the previous per diem?
If your employer states a project is greater than 12 months but, you only commit for 51 weeks, is per diem taxable?
PD is one of those mysterious payments subject to the whims of the employer and IRS and, interpretation by the employee (which can cause problems).
Some one needs to publish "The Dummies Guide to Per Diem, Expenses, and Taxes for Consultant Workers".
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Go to my website and look at the FAQ's- I cover most of this
If you know its > 12 months, its all taxable
If it starts at less than 12 months expectations and then changes to where you know you will be there > 12 months, PD is taxable from that point forward
If the contract states > 12 months and you work 51 weeks, its still all taxable since you agreed on paper to a longer time
traveltax:
--- Quote from: radbrat on Jul 16, 2014, 10:46 ---As it applies to the individuals that do travel, and are legitimate per-diem prescribers. What is the take on local workers that get more per hour to compensate for the lack of per-diem. They can be compensated $100-150 dollars more per week due to the increase in wages. Just because you are getting tax free per-diem, your total wage/earnings can be a liability due to the expenses incurred. Locals make out due to the lack of expenses that they have to compensate for.
--- End quote ---
Can you be more specific in the question? Unless you are just asking for how people feel about the additional compensation.
radbrat:
Yea....Just stirring the pot.
SCMasterchef:
So what is the position on a posting that states "one year, not 12 months with a potential for an extenstion" but not guaranteed. I took a position that the vendor stated to me that it was a one year contract but when arriving at the clients site was told, by the client, that it was only a couple of months and that the Vendor was talking crap. How does that fit the scope of this discussion? I have, on several occasions, taken a position that was short term, <12 months, and was on a month to month term for over 12 months. Normally I claim all per diem as wages and deduct my expenses, as stipulated by the IRS regulations, if it goes over 12 months.
traveltax:
--- Quote from: SCMasterchef on Jul 16, 2014, 11:46 ---So what is the position on a posting that states "one year, not 12 months with a potential for an extenstion" but not guaranteed. I took a position that the vendor stated to me that it was a one year contract but when arriving at the clients site was told, by the client, that it was only a couple of months and that the Vendor was talking crap. How does that fit the scope of this discussion? I have, on several occasions, taken a position that was short term, <12 months, and was on a month to month term for over 12 months. Normally I claim all per diem as wages and deduct my expenses, as stipulated by the IRS regulations, if it goes over 12 months.
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Poor advertising is one thing, but in the tax side of things a 4 month contract and a 12 month contract still fit within the definition of "temporary"
Why claim the per diem as wages and then deduct the amounts? That's a worse position bottom line
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