Tax Law (Questions About Taxes)/per diem

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Question
Dear Tax experts,

My significant other has finally agreed to have a "tax Professional" rather than a relative file his forms this year; however he has been working for the entire year in ND same relative area, but for another company first 6 months of the year and now his extended family.  They have both been paying him a daily per diem of around $100, just as a lump sum listed on a separate line on his check with no taxes withheld and no responsibility to report his expenses.  Is this in fact "nontaxable"?  Also the first company paid him an additional check each week with $40/day extra for having his own vehicle to use............. he carries a lax attitude on whether this is all taxable or traceable income.  The rules for accountable plans are confusing at best.  My worry is also on the few occasional weekends he has traveled home during the year, they have continued to pay out part of his wages as a per diem even though he was back home.......... what sort of issues does this create, is all of this taxable.....now that he has worked in ND for the whole year?  I fear this is not correct and there may be repercussions to follow.... thankfully we file separately and are not yet married.....

Answer
Sandy,

Thanks for your question.

The rules for an accountable plan are quite simple.  It boils down to an employee incurs expenses, the employee submits receipts or mileage records for those expenses, and is reimbursed by the employer for that amount.  The employee must report the expenses within 60 days. Such reimbursements are not taxable.

Anything not meeting this criteria is a non-accountable plan and is taxable income.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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