More tax questions....

StaySeated

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I think that this stuff has been covered here, sorry, but I been reading IRS forms all morning and do not want to dig anymore.

Can someone tell me what the "standard" DOT perdiem rate is? I have found "hi - low" numbers but not the average so I do not have to get a different number for each city I stayed at.

Also, when I subtract the difference between standard and my airline's pathetic perdiem amount, where do I itemize this deduction? If I add up the total and list it under expenses will the friendly IRS people know what I did? Thanks in advance for the info.
 

TurboS7

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Good question. I'll ask the same question only take it a little further, is there an averge per-diem rate for international travel or do you need to look up each city???
 

Jeff G

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The way the per diem deduction works is this. You figure the allowance for domestic and international travel separately. You can either use the standard per diem allowance for the whole year or you can use the allowance for each overnight station you stayed at, again for the whole year. The standard DOT domestic allowance is $38. You can use whichever total is higher for the year, but you can't mix and match. In other words, if you use the standard allowance, you can't say that, for instance, on Oct 3, you stayed in New York for a $46 allowance. If you do that, you have to take the individual city allowances for the whole year. Once you have the total allowance, you have to subtract your non-taxable per diem (your reimbursement) from that total. Multiply the difference by 0.60 (<--- DOT rule again) and now you have your deduction to put on your employee expenses form. You don't include taxable per diem in this calculation because you're already paying taxes on that amount elsewhere, and taxable per diem is for day trips only anyway.

Also, don't forget that you can claim a 3/4 allowance for any part of a day worked, which means that on the average you come out even on the deal to use this method rather than figure out the exact portion of the day you worked for each day. On the first day of a trip, if you're using the individual city allowance, take a 3/4 allowance for the city you're staying at that night. On subsequent full days, take the full allowance for the city you're staying at that night. On the last day, take a 3/4 allowance for the city you stayed at the previous night. Fortunately, for domestic cities, there are only 5 values for allowances you can have: 30, 34, 38, 42, and 46. That does make it easier to total up at the end of the year. Better yet, put the per diem allowance in your red logbook so you don't have to do the research later (e.g. 3/4-42 or 1-46). Of course if you use the standard allowance just total up the partial days you worked, multiply by 3/4 and then add the full days you worked. Multiply that by 38 and you're in business.

International works the same way, but I forget the standard allowance. You can itemize by city for int'l but take the standard allowance for domestic, or vice versa, whichever gives you the highest deduction. There's no problem there.

Good luck!

P.S. Murphy's law says that once you do all this work, it turns out you made too much in per diem and can't take any deduction. :D
 

TurboS7

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Thanks, we go to a lot of international destinations but we only get paid a std per-diem rate, so taxes give the only oppurtunity to even the score.
 
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