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Submitted By: someone
Answered: October 6, 2019 10:45 pm
Answered: October 6, 2019 10:45 pm
I am a contract engineer who normally works on projects away from home for less than a year. Are my per diem reimbursements tax free?
If you are reimbursed under an accountable plan, then reimbursements may be tax free. For example, if reimbursements for your mileage exceed the IRS standard mileage rate, then only amounts up to the rate are tax free; excess reimbursements are taxable.
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Tax Glossary
Withholding
An amount taken from income as a prepayment of an individual’s tax liability for the year. In the case of wages, the employer withholds part of every wage payment. Backup withholding from dividend or interest income is required if you do not provide the payer with a correct taxpayer identification number. Withholding on pensions and IRAs is automatic unless you elect to waive withholding.
