Per Diem not from employer

[erchess]

Taxpayer is a selfemployed Professional. He was recently appointed to the State Board that regulates his Profession. This involves monthly day long trips to the State Capitol for meetings. He is accountably reimbursed for his mileage so even he knows he can't claim the miles but we figure they are not taxable. My problem is that everything I find about reimbursements and per diems in TTB pertains to EMPLOYEES and I think he is not an employee of the State because he is not paid for service on the board. He does get $50 for each meeting that is intended to defray his expenses of service other than travel expenses. He is not required to account for his expenses but the $50 probably far exceeds his actual costs because he eats one meal and returns the same day.

So is the Per Diem Taxable? If I have to leave it in it costs him a whole dollar on the bottom line of the return. He did not receive a 1099 MISC or anything else from the state reminding him to tax himself on these monies but the amount is only $250.

[ChEAr$]

per diem

Taxpayer is a selfemployed Professional. He was recently appointed to the State Board that regulates his Profession. This involves monthly day long trips to the State Capitol for meetings. He is accountably reimbursed for his mileage so even he knows he can't claim the miles but we figure they are not taxable. My problem is that everything I find about reimbursements and per diems in TTB pertains to EMPLOYEES and I think he is not an employee of the State because he is not paid for service on the board. He does get $50 for each meeting that is intended to defray his expenses of service other than travel expenses. He is not required to account for his expenses but the $50 probably far exceeds his actual costs because he eats one meal and returns the same day.

So is the Per Diem Taxable? If I have to leave it in it costs him a whole dollar on the bottom line of the return. He did not receive a 1099 MISC or anything else from the state reminding him to tax himself on these monies but the amount is only $250.

Let's make sure I got this straight now. you say he does get reimbursed travel expenses?
Then that's a wash. But the $50 per day extra is taxable income, and no meal deduction,
since it's not overnight. Agree?

[fliszt]

The way I'm

going work this is: my wife is a sched C self employed. Hired to give a workshop in Miami she received $48.50/day per diem + mileage + income. When (or if) she receives a 1099 MISC I will not report income for the $48.50 per day as per diem. But I WILL deduct any day where the meal total exceeds $48.50. In either case she must have receipts to back up the per diem received. I don't remember where, but it is discussed in the pubs. Sorry, I'd look it up but gotta go, clients here.
Larry

[erchess]

Inclined to agree with Larry

We all agree (I think) that the mileage is a wash and not reportable or deductible. However there is as yet no consensus on the $50 per day.

My own thought is that the Federal Perdiem for the city in question was $53 all year per TTB. I therefore think a reimbursement of less than that would not need to be accounted for if this were an employee situation so I am inclined not to tax him on it.

[S T]

Per Diem

Or Reimbursement, however, you want to call it!

If my client says that they are reimbursed at a rate less than the Per Diem ME&I, and it is not included on the W-2, there is a line item on the form 2106. So I enter what the employee was reimbursed on that line, and then on the meals and entertainment line I enter the higher per diem rate, which carries to the line 21 subject to 2% on Schedule A for the employee to capture the deduction of the difference that they were not reimbursed for.

Seems like I have a few of these, as the employer is not either reimbursing the employee the actual government rate of ME&I or the Standard Mileage Rate.

Erchess, in your situation for self employed, you could show on the Sched C income line the reimbursement then take the deduction on mileage or meals, etc somewhere else on the return to offset. Or just take the offset, and add a detail schedule on your return to show the total expense, less reimbursement (but then if IRS does a bank analysis for the Schedule C, you might not balance and have to explain)

Sandy

[Burke]

Let's make sure I got this straight now. you say he does get reimbursed travel expenses?
Then that's a wash. But the $50 per day extra is taxable income, and no meal deduction,
since it's not overnight. Agree?

Well, I agree with you. $250 on Sche C in this case, or on Line 21 for other recipients not related to their occupation, and no meal deduction.