Per Diem less than Gov't Allowed

[jasdlm]

Client was paid per diem by her employer. Amount paid was less than max allowed according to Gov rates. A colleague told him he could deduct the difference. Really? I do not see that in Pub 463, but I am tired.

Thanks in advance for any ideas.

[kcjenkins]

Yes, as a Sch A Line 21 deduction, but not usually worth it unless the difference is a significant amount,

[David1980]

Another thing to watch out for is sometimes they are looking at per diem rates for lodging and the employer is giving them per diem rates for meals and incidentals. Since they know the deduction as simply "per diem" they don't realize one is allowed as a deduction for them and one isn't or sometimes even what expenses the per diem is supposed to cover.

[jasdlm]

I love this Board!

[mcb39]

I love this Board!

So do I!!!!!!!!!!

[Randall]

I thought if an employer reimburses an employee a M&IE per diem rate, the amount deemed substantiated was the LESSER of the employer's reimbursed rate or the federal rate. So,can the employee really deduct the difference on Sch A (unless his actual costs exceed his remibursement)? Don't have time now to check references.

[kcjenkins]

I thought if an employer reimburses an employee a M&IE per diem rate, the amount deemed substantiated was the LESSER of the employer's reimbursed rate or the federal rate. So,can the employee really deduct the difference on Sch A (unless his actual costs exceed his reimbursement)? Don't have time now to check references.

Well, of course we are talking about when the client's actual costs exceed his reimbursement. Otherwise, he has nothing to deduct, because he was fully reimbursed.

[Randall]

Yes, KC, but I thought the original post was that the client was paid an employer per diem rate and didn't keep track of his actual cost, but wanted to use the higher govt per diem rate deemed as his substantiated cost, then deduct the difference. My understanding is for self-employed persons and employees who are not reimbursed anything, they can use the govt per diem rate as their substantiated cost without keeping receipts. They still have to substantiate it is business travel with dates, travel log, etc.