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Itemized Deductions Schedule-A


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Old 03-12-2015, 07:41 PM
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Lodging Expenses (Can I use per diem rate or do I have to take actual expenses?)

My husband is an insurance adjuster and a contract employee for the company he works for. His job is temporary. I know that we can deduct his hotel expenses but I'm confused on if we have to take the actual expense deduction or if we can take the per diem rate. The per diem rate would give us more but my CPA is saying and I quote "if you refer to Publication 463 regarding W-2 employees (which he really is because he receives a W-2 and not a 1099), he must use actual lodging receipts but may use either the actual meals & incidental receipts OR standard per diem rates for meals & incidentals.

Can anyone help me out here? Please? I've been reading for hours and am so confused. I have other people in his field saying they take the per diem amount and that their CPA has always done it that way.



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Old 03-13-2015, 01:05 AM
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correct; Instead of deducting actual expenditures, taxpayers can use the per diem amounts for food and lodging in revenue procedure 93-50.

You only can take a tax deduction for work-related lodging expenses incurred outside of your business tax home. The IRS defines your business tax home as the municipality or general area in which you primarily work; For instance, if you own a home in LA CA, work in an office full time in San Diego and rent a room in San Diego for your work lodging, you cannot take a deduction for your San Diego lodging expenses. In certain cases, an employer may pay you a fixed travel allowance each pay period as part of your wages. In such cases, your employer typically requires you to pay your own travel costs, with no reimbursement arrangement. However, the IRS allows you to itemize your travel expenses to take a tax deduction.
If you receive a per diem or reimbursement that does not cover your entire travel costs, you can claim a tax deduction for qualified out-of-pocket expenses. In such cases, the IRS requires you to report your reimbursement or per diem as earned wages, but allows you to take a tax deduction by itemizing your expenses. These deductions are subject to the Internal Revenue Service's 2 %rule, so you can only deduct the total amount that exceeds 2% of your AGI. If your per diem or reimbursement covers all of your lodging and travel expenses, you cannot take a tax deduction. lodging costs associated with moving expenses are tax deductible directle on line 26 1040 not on sch A of 1040.



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Old 03-13-2015, 01:17 AM
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Thanks for the response. I understood most of that already. I know that he falls under the away from home category and he is also not reimbursed for expenses or paid a per diem. It's all out of pocket for us.

Just confused as to why our CPA is saying that we HAVE to use actual lodging expenses and aren't allowed to take the per diem amount instead. ? She says because he is an employee that he has to use the actual amount paid for lodging but can take the per diem amount for meals & incidentals. She cited a publication and I'm apparently not interpreting it the same way. To me it reads as though we should be able to choose which one we want to use.



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Old 03-13-2015, 02:39 AM
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Quote:
Originally Posted by JBankston0920 View Post
Thanks for the response. I understood most of that already. I know that he falls under the away from home category and he is also not reimbursed for expenses or paid a per diem. It's all out of pocket for us.

Just confused as to why our CPA is saying that we HAVE to use actual lodging expenses and aren't allowed to take the per diem amount instead. ? She says because he is an employee that he has to use the actual amount paid for lodging but can take the per diem amount for meals & incidentals. She cited a publication and I'm apparently not interpreting it the same way. To me it reads as though we should be able to choose which one we want to use.
in my opinion, your cpa either treats your spouse as a 1099 self emloyer or an employee reimbursed by his employer;the revenue procedure limits the use of per diem amounts for lodging to cases where an employer reimburses an employee with a fixed daily amount. That means self-employed individuals may not use this method for lodging expenditures. Instead, they must prove actual expenses based on the rules of section 274(d).



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Old 03-14-2017, 11:09 AM
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W-2 independent adjuster

Quote:
Originally Posted by JBankston0920 View Post
Thanks for the response. I understood most of that already. I know that he falls under the away from home category and he is also not reimbursed for expenses or paid a per diem. It's all out of pocket for us.

Just confused as to why our CPA is saying that we HAVE to use actual lodging expenses and aren't allowed to take the per diem amount instead. ? She says because he is an employee that he has to use the actual amount paid for lodging but can take the per diem amount for meals & incidentals. She cited a publication and I'm apparently not interpreting it the same way. To me it reads as though we should be able to choose which one we want to use.

My husband is a W-2 independent adjuster as well. What did you end up doing in regards to the living expenses. Did you do per diem for both meals and & entertainment and lodging or did you do per diem for meals and entertainment and actual cost for lodging?



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