Has anyone actually calculated what the reduced per diem would be if certain meals were provided? Like is there an official breakdown for how much of the daily rate is allocated to breakfast vs lunch vs dinner?

This is exactly the situation I was in last year! I was a 1099 contractor on a 6-month assignment about 400 miles from home. The key thing to remember is that the IRS doesn't care about the total dollar amount - they care about whether your assignment meets the "temporary" criteria (under one year) and whether you're truly away from your tax home. I claimed the full per diem for the entire period and had no issues. The amount does seem high when you calculate it out, but that's just the reality of extended business travel. Make sure you keep detailed records of your assignment dates, the temporary nature of the work, and your tax home location. For the cafeteria situation, I had something similar - free lunch was provided but I had to pay for breakfast and dinner. I calculated partial per diem using the standard breakdown (breakfast 20%, lunch 30%, dinner 50%) and only claimed 70% of the daily rate. Keep good documentation showing which meals were provided versus which you paid for yourself. One tip: consider keeping receipts for a few meals even though you're using per diem. It can help demonstrate that you were actually incurring meal expenses during your assignment if questions ever come up.

I used to work for elderly services. This screams financial exploitation tbh. The attorney and caregiver tag-team blocking you out is sus af

This is exactly why I always tell people to get their affairs in order early. The IRS doesn't mess around with unreported income, especially when it involves cash payments to caregivers. Your parent's attorney is giving terrible advice - even seniors have filing obligations if they meet income thresholds. I'd recommend getting a second opinion from a tax professional ASAP and maybe consider whistleblower protection if you decide to come forward about the unreported payments. The estate could be looking at serious liability here.

Great thread! I'm a tax preparer and wanted to add a few technical details that might help clarify things further. The 10% early withdrawal penalty is technically called an "additional tax" rather than a penalty, but it functions the same way - it's added to your tax liability without being included in your taxable income. This shows up on Form 5329 if you're filing manually, or gets calculated automatically in tax software. One thing I see people miss is that if you had federal income tax withheld from your 401k distribution (which should show in Box 4 of your 1099-R), that withholding applies to both your regular income tax AND the 10% additional tax. So if you had 20% withheld from an $8,000 distribution ($1,600), that $1,600 covers part of both the income tax on the $8,000 AND the $800 penalty. Also, for future reference, if you know you'll need to take an early withdrawal, consider doing it in December rather than January if possible. This gives you a full year to adjust your withholding or make estimated payments to cover the additional tax burden, rather than scrambling to catch up mid-year. The AGI ripple effects that Diego mentioned are spot-on - retirement distributions can impact everything from child tax credit eligibility to Medicare premium calculations. Tax software handles these automatically, which is why manual calculations often fall short.

As a newcomer to this community, I want to thank everyone for this incredibly informative discussion! I'm facing a similar situation with an early 401k withdrawal and was equally confused about whether the penalty itself was taxable. Reading through all these responses has been so helpful. The consensus is clear that the 10% penalty is NOT taxable income - it's an additional tax calculated separately and added to your total tax liability. Maxwell's explanation about it being technically an "additional tax" shown on Form 5329 really clarified things for me. What I found most valuable was learning about all the secondary effects of the withdrawal that can throw off manual calculations - the tax bracket progression, AGI phase-outs for credits and deductions, and other ripple effects throughout the tax return. No wonder my own spreadsheet estimates were way off compared to tax software! For anyone else in this situation, it sounds like the key takeaways are: 1. The 10% penalty itself is not taxable income 2. The withdrawal amount gets added to your taxable income (potentially pushing you into higher brackets) 3. Tax software accounts for complex interactions that are easy to miss in manual calculations 4. Double-check your 1099-R distribution code to ensure it's accurate 5. If you had withholding, it applies to both the income tax AND the penalty Thanks again to everyone who shared their experiences and expertise - this community is incredibly helpful for navigating these complex tax situations!

idk why they gotta make everything so complicated with these codes. just tell us whats happening in plain english smh

Code 290 is basically the IRS confirming they've processed your return and assessed your tax liability. It's usually a good sign! The amount next to it should match what you reported on your 1040. If it shows $0.00, that means no additional tax was assessed and your return was accepted as filed. Keep an eye out for a 846 code next - that's the refund issued code everyone's waiting for! 🤞

This is such a helpful thread! I'm in a similar situation with a property in the Philippines that I inherited from my parents about 8 years ago. I've been renting it out and reporting the income, but I'm considering selling it now. One thing I'm curious about - since this was inherited property, do I use the fair market value at the time of inheritance as my basis, or do I need to go back to what my parents originally paid for it decades ago? And if it's the fair market value at inheritance, which exchange rate do I use - the one from when they passed away or from when the property was officially transferred to me (which took about 6 months due to probate)? Also, has anyone dealt with the situation where the foreign country requires you to pay their capital gains tax before you can transfer the proceeds out of the country? I'm wondering how that affects the timing of when I need to report everything to the IRS.

This is such a valuable discussion! I'm dealing with a similar situation with property in Germany that I bought in 2008. One thing I'd add that hasn't been mentioned yet - make sure you keep detailed records of any improvements or renovations you made to the property over the years. These can be added to your basis and reduce your capital gains. Also, if you've been depreciating the property on your US returns, remember that you'll need to use the depreciation amounts you actually claimed (or were allowed to claim, whichever is greater) when calculating the depreciation recapture, not necessarily what you should have claimed. For anyone dealing with properties in EU countries, be aware that some countries have withholding requirements where they'll hold back a percentage of the sale proceeds to cover potential tax liabilities. You can usually get this refunded later, but it affects your cash flow timing. Germany withheld about 25% of my sale proceeds and it took 8 months to get the refund after filing their tax return. The currency exchange impact is real - in my case, the Euro had strengthened against the dollar since 2008, so even though the property only appreciated modestly in Euro terms, my dollar-based capital gain was much larger than expected.