Tax Law (Questions About Taxes)/Taxing of Subsistence

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Question
I receive untaxed subsistence from my employer , I live in Washington state and they have sent me to Oregon to work . My union contract allows me up to 175 dollars a day. I have been informed that if I receive subsistence for 52 consecutive I owe the irs taxes on this money ? My question is if I have a break in that period does it start over ?

Answer
Sean,

Thanks for your question.

The rule states that if you are on an assignment that is of indefinite duration or is expected to last more than 12 months, any travel expenses are not deductible. Likewise, any payment for such expenses from your employer are taxable.  Merely taking a break does not start it over, as the IRS considers it the same assignment.  Their position is that if the assignment lasts more than a year, you have changed your tax home and are living in OR, not WA.  

You also need to be aware of state income taxes in the state in which you work. You will be subject to tax on your OR earnings in OR.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

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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

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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

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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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