Meal Allowances

[GCU, EA]

I wonder why some tax preparers and the IRS consider travel expenses subject to 2% of Fish Processors working in Fishing Boat in Alaska as part of Itemized Deduction.

Fish Processors are paid based on percentage of net income (after food expenses) of the boat. They received W-2's not 1099. Their 2% deductions includes tickets, gears and meal (based on number of days at sea times rate per day)in addition to their other Itemized deductions. Meals are all expenses by the Fishing boat company and nothing is being deducted from their pay. To prove them that they were at sea, they attached what the call "Sea Time" from their employer.

I do not allow these deductions to tax returns Fishersmen I prepared . Am I doing right?
Please check me if their is something like regulations I missed to read.

[Bees Knees]

If have never done a return for a commercial fisherman before, but according to IRS Pub 595, if a boat has an operating crew that is normally made up of less than 10 individuals, each person is considered self-employed rather than an employee. As a self-employed individual, the special rules for income received from fishing would apply.

So assuming the people you are talking about are NOT self-employed under the special fishermen rules, then I would assume they are treated just like any other employee; Unreimbursed employee business expenses go on Schedule A, subject to the 2% limit. It would not matter that they are incurred on the boat, on top of a mountain, or in an office building – all employees are entitled to deduct unreimbursed employee business expenses.

Now as to what are unreimbursed employee business expenses, meals and lodging while an employee is away from his or her tax home are deductible. The question is, where is the tax home of the employee fisherman? Is it on the boat? That depends upon the facts and circumstances, of which we no little about based upon your question.

[JON]

Statutory employee

Read the PUB(above). Your only hope would be statutory, but that is a narrow classification, but allows you to move W-2 to C if qualifies. Employer has to prepare W-2 with the box checked(or should).

[Unregistered]

Anything the company pays for that is not included on their W-2 as income is not a deduction anywhere on the return.