Pre-2019 Post: Can I deduct my per diem expenses for working out of town?

[john191]

I'm an engineer working in the aerospace industry. I'm working as a contractor and have to travel far from my home to work at a client site. I have to rent an apartment or hotel, have to pay my own flights and car expenses, and pay my own meal expenses. My contract company considered me as an employee and reported my income on a W2. Can I claim the apartment/hotel, flight & car, and meals as per diem on my income tax since I have to maintain dual living expenses? How do I claim the expenses on my income tax? Thank you

[HelenaC · Accepted solution]

Yes, you can deduct per diem or actual job related expenses, like meals, lodging, air fare, cabs, dry cleaning, etc., if your assignment away from your main workplace is temporary (expected to last, and does last, for one year or less). If your assignment is indefinite (expected to last for more than one year) then your new workplace becomes your tax home and you cannot deduct your job related expenses.

If you are a Department of Transportation (DOT) worker, click on: What does "You are in the transportation industry" mean? and  Where do I enter my Department of Transportation (DOT) per diem?

The amount claimed must be reduced by any amount that is reimbursed by the employer.

If you are an employee, your allowable travel expenses are figured on Form 2106 or Form 2106-EZ. Your allowable unreimbursed expenses are carried from Form 2106 or Form 2106-EZ to Form 1040, Schedule A (PDF), and are subject to a limit based on 2% of adjusted gross income. Refer to Topic 508 for information on the 2% limit. If you do not itemize your deductions, you cannot deduct these expenses. 

To enter your Job Related Expenses, click on  Where do I enter job-related employee expenses? (Form 2106)

Additional information :

https://www.irs.gov/taxtopics/tc511.html

[john191]

I'm confused about the 2% rule. So if my adjusted gross income is $100,000 per year, I cannot deduct any job related expenses?

[HelenaC]

You have to have a higher amount of expenses than $2,000. For example, if your AGI is $100,000 and you have $2,001 of job related expenses, only $1 will be deductible.

[HelenaC]

If you have deductible expenses that qualify as miscellaneous itemized deductions, you can deduct certain of those expenses only to the extent that they exceed 2% of your adjusted gross income. For an explanation of deductible and nondeductible expenses, refer to Publication 529, Miscellaneous Deductions. https://www.irs.gov/taxtopics/tc508.html

[antonio1]

Clarification:  You can't deduct Per Diem for Lodging, only for Meals.  Per IRS Publication 463 "There is NO OPTIONAL STANDARD LODGING AMOUNT similar to the standard meal allowance. Your allowable lodging expense deduction is your actual cost." https://www.irs.gov/publications/p463    &    https://ttlc.intuit.com/questions/2933257

[Jim11141]

Helena, that deduction is for W-2 employees, and, the deduction was eliminated for years 2018-2025.

He is asking about deductions against a 1099.

[Critter]

This thread was started way back in 2017 or earlier and was converted in early June 2019 when the forum was migrated to a new format ....  so the earlier posts do not apply to 2018 returns going forward.  

[Kn5ght63]

Flight attendant per diem expense. How do you claim on your tax return?

[gloriah5200]

If you are a W-2 employee, working for a contractor, and had to travel for your W-2 job for 2020, then you need to ask your employer to reimburse you for your travel expenses because they are no longer deductible on Schedule A subject to 2% agi for W-2 employees (not since tax year 2018 returns).

For additional information, please refer to the following link:

w-2 employees can no longer deduct travel expense on Sch A

Also remember, W-2 employees can no longer deduct any unreimbursed travel expenses. That deduction was eliminated in the tax reform act of 2018.  A W-2 employee can list the expenses and they might flow through to the state return for a state deduction, depending on your situation, but they don't qualify for a federal deduction. 

[Ax1043320]

That previous best answer is wrong. He asked if he could deduct his out-of-town expenses AS per diem. If you're paid on a W-2, unless you're reservist or performing artists, you can't deduct any expenses. If you are actually pay a separate per diem fire employer that per diem may be tax-free I'm not sure or you might be able to write off your out of town expensive against slash or up to the amount of your per diem. But per diem this money your employer gives you for expenses in addition to your regular hourly pay. Asking if you can write off expenses as per diem doesn't even make any sense. They are too completely different things per diem and expenses.

If you're starting and out of town job the best that you can do is ask for as much per diem as you can get or price those additional out of town expenses into the rate that you're asking for from that company you're working for or your staffing agency.