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Financial Planning / Tax Strategies
|Subject: Compensation package||Date: 10/24/2004 12:07 PM|
|Author: sarkdog||Number: 73867 of 121218|
I am in the process of negotiating a compensation package with a potential new employer.
If I accept this position, I will be at their main location for most of a year in training to open a branch in my present city. I believe the situation meets the IRS definition for a temporary assignment.
My present home is about 275 miles from the main office. I will be returning home on most weekends.
As I understand it, the expenses that I might be able to deduct in full or in part are as follows:
Cost of lodging in the other city
Per diem cost of MIE
Mileage, both in the temporary location and driving back and forth to my home
I have three questions:
1. I have been unable to determine whether the MIE expense is fully deductible or 50% deductible. Which is it?
2. My employer is willing to set up an accountable plan to reimburse me for these expenses. The amount of my salary will be reduced by the projected amount of these total expenses during this period. As I figure it, this shifts my income for this amount from taxable to non-taxable while significantly reducing the amount of burden my employer pays on my salary. The question is: Are all of the above expenses fully deductible by my employer if part of an accountable plan? Would this amount be reported as income on a W2?
3. An accountable plan requires that the employee account to the employer for the amount of meals, among other expenses. I have been unable to figure out whether this requires me to submit actual receipts or if the amount allowed for per diem is adequate documentation that can be paid regardless of the actual amount spent. Also, can the employer deduct the full amount of the per diem as a legitimate expense under the accountable plan, or only 50%?
OK, that's really 5 questions! :)
Thanks in advance for any comments.
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