Per Diem Versus Itemization


A

ajocius

Group,
I'm sorry I don't speak the accounting/finance language. I'm an
engineer who travels a lot. I believe doing expenses using a per diem
system would be more efficient then a itemized system (present system).
Can someone direct me where I can get information on the pros and cons of
each system. Thank you in advance for your help.

Tony
 
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D

Duane Bozarth

ajocius said:
Group,
I'm sorry I don't speak the accounting/finance language. I'm an
engineer who travels a lot. I believe doing expenses using a per diem
system would be more efficient then a itemized system (present system).
Can someone direct me where I can get information on the pros and cons of
each system. Thank you in advance for your help.
From the viewpoint of whom? Are you self-employed or traveling for an
employer?
 
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R

R

Group,
I'm sorry I don't speak the accounting/finance language. I'm an
engineer who travels a lot. I believe doing expenses using a per diem
system would be more efficient then a itemized system (present system).
Can someone direct me where I can get information on the pros and cons of
each system. Thank you in advance for your help.

Tony
Tony,

There are two types of expense plans, an accountable plan (expense
report) and non-accountable plan (per diem). With both plans, the
amounts paid to the employee are deductible by the company.

Under the accountable plan, the employee saves the receipts, turns
them in on an expense report, and is reimbursed his (or her) expenses.
Since the employee is "accountable" for his (or her) expenses, it is
merely a reimbursement of expenses. Therefore, it is not reportable
to the IRS by the employee.

Under the non-accountable plan, the employee is given a flat per diem
amount. This amount should show up on the W-2. The employee would
still save his (or her) receipts, and claim the expense on Form 2106,
Employee Business Expense. The deduction would end up on the
Miscellaneous Deduction section of Schedule A.

For more detail, try this link to the IRS website:
http://www.irs.gov/govt/tribes/article/0,,id=135047,00.html

I hope this helps,
Russell Tuncap, CMA, CPA
www.tuncap.com
 

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