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Tax question - 9/27/2006 11:00:33 AM
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Rookie
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Joined: 11/2/2005
Home base: Kentucky
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Last year there was a thread discussing tax issues. One of the topics dealt with a daily per-diem that can be written off for those who work out of town, and stay overnight. If I recall, the amount that was discussed was $141 per day. I was just wondering if anyone ever discussed this matter with a CPA, and what they said.
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RE: Tax question - 9/27/2006 11:28:20 AM
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K ung Fu tzu
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Joined: 10/8/2005
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The daily per-diem deduction is different in every city and it changes frequently depending on the date(s).
Here is a link to the rate table. If you go to IRS.gov, they will link you to this site.
http://www.gsa.gov/Portal/gsa/ep/home.do?tabId=0
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RE: Tax question - 9/27/2006 11:54:38 AM
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doppler
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I was under the impression it was 4500/month. My CPA used my actual expenses as this was a better outcome.
I heard that your tax rate comes out of the above figure and you do not pay in that %.
For example: 30% tax rate = $1350.00 deduction per month.
Keep in mind, I know about as much of that stuff as my CPA knows about claims.
So, we decided he will do the tax stuff and I will do this.
Dopp-
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RE: Tax question - 9/27/2006 3:32:11 PM
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K ung Fu tzu
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Dopp,
I'm not a CPA and I'm cautious about ever giving tax advice, but I can only vouch for 20 years on the road and two IRS audits and tell you that per-diem is a bit more complicated than the above figures you mention. Perhaps that was your CPA simplifying his explanation to you? I do also know for a fact that it's different in each area of the country. The website I provided a link to in the previous notes gives a pretty good breakdown of what the IRS considers to be part of per diem expenses.
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RE: Tax question - 9/28/2006 10:20:19 AM
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Rookie
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quote:
ORIGINAL: K ung Fu tzu
The daily per-diem deduction is different in every city and it changes frequently depending on the date(s).
Here is a link to the rate table. If you go to IRS.gov, they will link you to this site.
http://www.gsa.gov/Portal/gsa/ep/home.do?tabId=0
Thanks for that link. I have another question you might know the answer to. Is the per diem rate based on where your home is, or where you are working? The website seems to suggest that it's based on where you live, but it makes more sense that it would be based on the cost of living in the city where you are working. Any idea?
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RE: Tax question - 9/28/2006 10:46:28 AM
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K ung Fu tzu
Posts: 24
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It's based upon the area you're working, not the area you live. Remember, I'm not a CPA but I can tell you what I claimed on my schedule C as prepared by one.
The per-diem rate for New Orleans starting Sept. 1 was $133 for lodging and $47 for meals = $180 per day. However, I only claimed the meal per diem because for various reasons, my lodging and travel exceeded the per-diem allowance.
Also, and this is important.....under general circumstances, only 50% of the meal per-diem is deductible on your schedule C. Don't ask me why, it just is. Here is a link to the instructions for the form. schedule C instructions Meal per-diem is entered under line 24B.
Also remember, that these are instructions for 2005 returns.
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RE: Tax question - 10/1/2006 11:41:32 AM
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Betrock
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I, too am not a tax accountant. But I believe that the GSA per diem amounts are fully deductible on Schedule C. This assumes you are 1099'd by your vendor and not W-2. If only W-2, then obviously Schedule C does not apply.
As I understand it, the GSA amounts are the maximum allowable for Lodging and Meals and Incidental Expenses (M&IE), and are fully deductible on Sched C. Any amounts over the GSA are not allowed. We're talking "unreimbursed expenses" here only.
Also if you are a W-2 person, then your expenses are subject to a limit - I think it's 50%. There are also a bunch of rules about how you have to account or not account to your employer for your expenses that affects their deductibility.
A little bit of knowledge is a dangerous thing...... so take this with a grain of salt!
Best,
Betrock
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RE: Tax question - 10/1/2006 5:36:22 PM
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khromas
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There is a good reason why CPA's do NOT adjust insurance claims ....
and ADJUSTERS should NOT offer ANY TAX ADVICE, regardless of the number of disclaimers produced!
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Kevin Hromas
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Definition of a LIBERAL: a person who is so open-minded that their brains have fallen out!
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RE: Tax question - 10/1/2006 6:02:46 PM
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Tom_Toll
Posts: 560
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Tax, Politics, Religion, Income, no no's, in my opinion.
_____________________________
Success is not final, failure is not fatal: it is the courage to continue that counts.
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RE: Tax question - 10/2/2006 3:05:07 PM
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Tiger
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I hate to think of how much more of my money the IRS would have if the only tax saving tips I ever received was from my CPA.
I hate to think of how much more of my money my CPA would have if I went to him with every rax question I ever had.
I mean, my CPA is my cousin and I like him, but he doesn't work for free. In fact I had to give him tax advice. He lives in Rhode Island and had no idea that a special tax law was passed allowing victims of Katrina and/or Wilma to deduct the amount of the loss that was not reimbursed (due to deductible or coverage exclusion). That was a nice $7,000 deduction on my return.....and I informed many an insured who had no idea to consult their CPA with regards to their hurricane claims.....and never thought twice about it. Bottom line is, the only people responsible are the ones who sign the tax return. I just don't understand the paranoia about tax advice.
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RE: Tax question - 10/2/2006 4:17:04 PM
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Tom_Toll
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Tax laws vary and sometimes change mid stream. Different States have different tax structures. I don't feel it is paranoid to not want to take advice from those other than in the profession of assembling tax burdens. What if you made a post here on CADO and some took that post to be real, did taxes based on that post, and were audited by the IRS and then was determined that the post was misinformation. I would not like to have my name behind that post.
_____________________________
Success is not final, failure is not fatal: it is the courage to continue that counts.
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RE: Tax question - 10/2/2006 4:41:45 PM
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jwg
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Home base: Texas
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When I was an agent, the company put on a seminar with a CPA that specialized in handling agents. He gave us some great advise regarding organizing and preparing for taxes, of course he also pitched his service. Now this was years ago and I never used him or even remember his name, but I would be interested in knowing if there is a CPA that does IAs. I've heard some outrageous claims of deductions that were taken by our piers, so I would be hesitant a to take anything as tax gospel from anyone other than a tax proffesional.
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RE: Tax question - 10/2/2006 5:48:24 PM
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Tiger
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quote:
ORIGINAL: Tom_Toll
Tax laws vary and sometimes change mid stream. Different States have different tax structures. I don't feel it is paranoid to not want to take advice from those other than in the profession of assembling tax burdens. What if you made a post here on CADO and some took that post to be real, did taxes based on that post, and were audited by the IRS and then was determined that the post was misinformation. I would not like to have my name behind that post.
What I'm saying is that the paranoia in this forum is in giving the advice. Why? If you are familiar with the tax law and have something useful to offer, why wouldn't you? I'm not a general contractor. Does that mean I should not give advice to somebody on how to repair their home? Advice is exactly that - it's a not a professional service rendered for a fee and I don't need to be educated, certified or licensed to offer it. If somebody is dumb enough to file a return based on bad advice or misinformation, or whatever you want to call it, or whatever it turns out to be without first verifying it through a CPA, tax professional, the IRS website or whatever.........there's only one person that is going to get audited and/or deal with the consequences of an improper return - the guy that signed the return. For that matter, even if the advice turns out to be truthful tax-saving information, only an idiot would follow it without properly verifiying it.
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