Per diems/business expenses

[sammypaints750]

My company pays for overnight food/entertainment $30.00 for whole day per diems and $15.00 for half day per diems. I was told the federal per diem is more than that so how do I fill this information on my taxes to maximize deductions?

[DanielV01]

Are you a trucker or in another field?

[sammypaints750]

I am a District Manager. So every time I pay for a hotel they give me a per diem for food. Someone said that in NC the federal per diem was $51.

[DanielV01 · Accepted solution]

You are correct.  In fact, in some localities the amount you may receive could be higher.  And, while your company is giving you a per diem for food, the Federal Government gives a per diem for lodging as well.  On this government website:  Per Diem Rates - GSA (click on link), you may see the specific rates for any place for which you had overnight stays.  You will use 2016 for rates from January to September, and 2017 rates for October through December.

To enter into TurboTax, you will need the section of the program which can be accessed by following the instructions in this FAQ:  https://ttlc.intuit.com/replies/4800418.  Once you are there, you will want to look for the screen and the entry boxes that I will attach to the end of this answer.

You will enter the full per diem amounts (multiply the per diem rates by the number of overnights), and then put the totals into the lodging and meals categories.  You will get the full amount for the lodging and 50% for the meals.  Later, you enter the amount of reimbursement you received.  The left-over that was not reimbursed is potentially deductible, especially if you are already itemizing as compared to taking the standard deduction.

Here is the screenshot that shows where to enter this (you do have to do the math first, however):  

[sammypaints750]

Thank you so much!! Very detailed!

[DanielV01]

Always a pleasure to assist

[sidsaber]

I am a traveling salesman. I wonder how much in food allowance I have While I am in WI where on sch C I am supposed to write it.

[ColeenD3]

@sidsaber

You can consult the IRS Publication regarding Per Diem. You can look up any state and most cities. Per Diem.

You would enter it under Meals and Entertainment. When you access the expense portion, it will be listed.

[b00029141]

I don’t believe this is current. You need to look at the 2022 year. From what I’m seeing due to the 2017 tax reform you can’t write off per diem anymore? So the meals and lodging that was added to my w2, which is non taxable income, is now being taxed? 

[Vanessa A]

You are correct.  If your employer included meals and lodging reimbursements in your W2, you are being taxed on the reimbursements as you cannot claim a deduction for them as an employee. 

If you are getting a 1099-NEC instead of a W2, then you would be able to claim the expenses.

You could contact your employer and ask for a corrected W2 that removes the expense reimbursements from your box 1 taxable wages. 

[b00029141]

This is really confusing. I had to come out of pocket for a place to live while working in another state, food to eat. Then wait two weeks for the employer to pay me my per diem and then W2 me on my per diem and hourly. Then only take out less than ten percent in taxes from my check. Now I owe taxes on nontaxable money I had to use to live and eat just to work. So due to congress changing the tax laws In 2017, I can’t write anything off due to being a W2 employee. Does this now make me self employed. I don’t understand. 

[JohnW152]

You’re not self-employed when you’re an employee receiving a Form W-2, and you can’t write off expenses from your employment as a self-employed person would be entitled to do.

You are correct that, by Congress changing the law several years ago, you can’t write off employee expenses that you likely would’ve been able to deduct before the law was passed.

Please see the TurboTax Help article Am I considered self-employed? for more information.

@b00029141