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Subject:  Re: No taxes on Per Diem billed to customer? Date:  1/12/2005  9:58 AM
Author:  saydiver Number:  75470 of 127542

I am a self employed consultant who was told by a potential customer that if I line item invoice them for travel expenses at the local per-diem rate ($145/day for lodging and meals according to IRS charts) they will not report it to the IRS as they would the regular 1099 income for hourly services delivered. The implication is that I won't owe taxes on the per-diem reimbursables.

Is this possible?

If you're on a temporary assignment away from home and the assignment is not expected to last more than a year, you can deduct per diem for travel expenses. If you have any indication the contract will be extended, then the assignment is no longer considered temporary.

Good luck on getting a broker to pay per diem correctly. The problem is most brokers insist on paying per diem, by substracting from your hourly rate, instead of substracting the per diem rate per day. Also, if you do not travel home on the weekend, per diem should be paid for 7 days, instead of 5.


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