Re: per diem

["Cramer, Kim" <Kcramer -at- NCSLINK -dot- COM>]

Barbara Karst-Sabin asked about per diems.

In my previous life working as a contractor for a job shop, I received
per diems on several projects.

On one project, the per diem was $40/day max.  We had to provide
receipts for all meals and expenses (such as dry cleaning), and were
reimbursed for what we actually spent.  The per diem did not cover
airfare, housing or car rentals; these were paid 100% and usually
arranged by the contracting firm, not the contractor.  This arrangement
is similar to where I work now (we're reimbursed for expenses within
established guidelines).

On another project, I was in a different town for nine months.  I
negotiated a per diem arrangement that was based on how many hours I
worked; in other words, the hourly per diem was multiplied by the number
of hours ($10 x 40 hrs = $400/week).  This per diem covered all of my
expenses: housing, car rental/mileage, food, and so on.  I did not have
to report my actual expenses, and by pinching pennies, was able to save
a nice chunk of the per diem money.  I'm not sure if this type of per
diem is still allowed by the IRS, but I didn't have any problems at the
time.

In both cases, the per diem amounts were not reported on my W-2 as
income and I wasn't taxed on it.

Maybe what the job shop is saying is (based on a $44,000/yr salary, for
example) that $22,000 would be reported as income on a W-2 and the
remainder would be considered expense reimbursement.  I would definitely
gather more information on this (and get it in writing!) before signing
on the dotted line.

HTH

*******************
Kim Cramer
mailto:kcramer -at- ncslink -dot- com
Sr. Information Developer
NCS Education, Mesa AZ
*******************