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Subject:Re: Hourly Rates and Per Diem From:Jill Shindelman <jill_shindelman -at- yahoo -dot- com> To:TECHWR-L <techwr-l -at- lists -dot- raycomm -dot- com> Date:Wed, 15 Mar 2000 11:26:05 -0800 (PST)
I've worked on a number of out-of-town contracts which
included a per diem. Perhaps the most important
aspect of the per diem is keeping the IRS happy.
In all cases, the recruiting firm offered a certain
number of dollars per hour above the rate paid for the
actual work done. The amount varied depending on the
area of the country where the project took place.
When I actually worked on the contract, I would fill
out two time sheets every pay period: one showing the
number of hours worked for "salary" purposes, and the
second showing the same number of hours worked for
"per diem" purposes. The second form was set up in
such a way that it also served as documentation for
the IRS that I was maintaining a residence throughout
the period in a place other than my work location, and
that it was greater than (50? I forget, but the IRS
has its rules) miles away.
Every pay period, I would receive two checks: a
regular paycheck with all deductions taken out, and a
per diem check for the number of hours worked times
the per diem hourly rate. No taxes were deducted from
the per diem check. Then, at tax time, I filled out a
Schedule C showing that my living expenses on the
contracts were at least as great as my per diem
payments, so the IRS could not try to subject me to
paying taxes on the excess per diem.
Out-of-town contracts can be fun, almost like paid
vacations. But you do have to be careful about the
per diem aspect. And one final piece of advice: be
sure to get a good accountant!
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