My per diem for meals is being taxed, can I deduct these meal expenses on my tax return?
Title: My per diem for meals is being taxed, can I deduct these meal expenses on my tax return? 1 I work as a traveling construction supervisor and my company provides per diem for meals when we're on job sites away from home. They usually give between $15-$22 per meal depending on what project I'm assigned to and the client's budget. They offer this either as a fixed amount added to each paycheck or let us use the company card for purchases. Here's my issue - for the jobs where they add the fixed amount to my paycheck, it's getting taxed as regular income. Since this meal per diem is being taxed as part of my wages, I'm wondering if I can deduct 50% of these meal expenses when I file my 2025 taxes? It seems unfair to be taxed on money that's supposed to cover necessary expenses while traveling for work. Has anyone dealt with this situation before?
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LilMama23
7 This is a good question about per diem and tax deductions! When your employer includes per diem payments in your W-2 wages (and they're being taxed), you're in what's called a "non-accountable plan" situation according to IRS rules. Prior to the Tax Cuts and Jobs Act, employees could potentially deduct unreimbursed business expenses (including meals) on Schedule A as itemized deductions subject to the 2% AGI floor. However, these miscellaneous itemized deductions were suspended from 2018 through 2025. Unfortunately, as an employee receiving taxable per diem, you currently cannot deduct those meal expenses on your personal tax return. The better approach would be to ask your employer to switch to an "accountable plan" where per diem isn't included in your taxable wages. Under an accountable plan, you wouldn't be taxed on the per diem amounts and the employer handles any necessary documentation.
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LilMama23
•12 Thanks for explaining that. So basically I'm just out of luck until 2026 when those deductions might come back? Is there any way to get my employer to change how they're handling the per diem? The company card option seems better since that wouldn't show up as income on my W-2, right?
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LilMama23
•7 You're right about the company card being a better option since those expenses wouldn't be treated as taxable income to you. As for getting your employer to change their system, it's absolutely worth discussing with your payroll or HR department. Explain that their current "non-accountable" plan is creating an unnecessary tax burden for you. Even though the potential return of miscellaneous itemized deductions in 2026 might help, there's no guarantee those provisions will be restored. Many employers aren't aware that their per diem system might be disadvantaging employees from a tax perspective. If multiple employees raise this issue, they might be more inclined to switch to an accountable plan system.
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LilMama23
15 I ran into this exact same issue last year working as a field technician. After doing a ton of research and getting frustrated with my tax situation, I found this AI-powered tax assistant called taxr.ai that really helped me understand my options with per diem payments. I uploaded my W-2 and some of my pay stubs that showed the per diem payments, and the system analyzed everything and explained exactly what was happening with my taxes. It confirmed what the previous commenter said about non-accountable plans but also helped me draft a letter to my HR department explaining why changing their per diem system would benefit both employees and the company. You can check it out at https://taxr.ai - it saved me hours of research and helped me get my company to change their policy for the next tax year.
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LilMama23
•3 How exactly does this system work? Does it just give general advice or can it actually look at my specific tax situation and documents? I've tried tax software before but they just seem to ask generic questions without really addressing unusual situations like this per diem issue.
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LilMama23
•9 I'm kinda skeptical about these AI tax tools. How accurate is it really? And does it have actual tax professionals reviewing anything or is it just an algorithm making guesses? Per diem rules are pretty complex.
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LilMama23
•15 The system actually reviews your specific documents and provides personalized analysis based on your situation. It's not just generic advice - it identifies the specific issues in your tax documents and explains how tax laws apply to your exact scenario. It can recognize when per diem is being reported as taxable wages on your W-2 versus when it's being handled properly. It combines AI document analysis with tax expertise, so you're getting accurate information. The platform has tax professionals who develop and validate the system's knowledge base, but the AI does the document analysis. What made it valuable for me was that it explained the per diem issue in plain language and gave me specific steps to address it, including template language for talking to my employer.
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LilMama23
3 I just wanted to follow up after trying taxr.ai that was mentioned earlier. I uploaded my last three pay stubs and my W-2 from last year, and it immediately identified that my per diem was being incorrectly handled through a non-accountable plan. The analysis showed I was paying about $1,400 extra in taxes annually because of how my employer was processing the per diem payments! The system generated a detailed explanation I could share with my HR department and even provided IRS references they could look up. My company is now reviewing their per diem policy for next year. Even though I can't deduct those expenses on my 2025 taxes, at least I might get this fixed going forward. Definitely worth checking out if you're dealing with per diem issues.
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LilMama23
18 If you're struggling to get answers directly from the IRS about your per diem situation, you might want to try Claimyr. I spent weeks trying to reach someone at the IRS about a similar issue with taxable reimbursements and couldn't get through their phone system. Claimyr got me connected to an actual IRS agent in under 45 minutes when I had been trying for days on my own. You can see how it works at https://youtu.be/_kiP6q8DX5c - basically they navigate the IRS phone tree for you and call you back when they've got an agent on the line. I was able to get official clarification about my particular situation at https://claimyr.com which helped me document everything properly and avoid potential issues down the road.
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LilMama23
•22 Wait, so this service just calls the IRS for you? How does that even work? I thought the whole problem is that nobody can get through to the IRS no matter what. What's their secret method?
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LilMama23
•9 This sounds like complete BS to me. Nobody can get through to the IRS during tax season - it's literally impossible. I've tried calling over 50 times this year. There's no way some service can magically get through when millions of people can't. Sounds like a scam to take people's money when they're already frustrated.
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LilMama23
•18 They have a system that continuously redials and navigates the IRS phone tree until it gets through - something most of us don't have the time or technology to do ourselves. It's not magic, just persistence and automated technology handling the frustrating part. They don't share calls or personal information - they just connect you directly with the IRS agent once they get through. I was skeptical too, but when you're desperate for answers about a tax situation like per diem that could affect thousands of dollars, it's worth trying. I needed official clarification from the IRS that I could reference in documentation for my employer, and this was the only way I could actually get someone on the phone.
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LilMama23
9 I need to admit I was completely wrong about Claimyr. After complaining about it here, I was still desperate to talk to someone at the IRS about my per diem situation, so I gave it a shot. I was connected with an IRS agent in about 35 minutes when I had been trying for weeks on my own. The agent confirmed everything that was said in this thread - employee business expenses including per diem under a non-accountable plan can't be deducted through 2025. BUT they explained that my employer could retroactively reclassify my per diem payments if they issue a corrected W-2, which might be possible since we're still early in the year. This was specific information I couldn't find anywhere online, and actually speaking to someone at the IRS gave me the confidence to approach my employer with a solution instead of just complaining. Sometimes you need to hear it directly from the source!
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LilMama23
5 Per diem rules are so confusing! I'm a traveling nurse and my company handles it differently from yours. They pay me a tax-free per diem as part of an accountable plan, but I have to verify I actually incurred the expenses by submitting a form each month (not actual receipts though). My understanding from my research is that your company is handling per diem incorrectly. Per diem that's paid under a proper accountable plan should NOT be taxed. Maybe show your HR department the IRS Publication 463 which explains all this? The company is actually creating more paperwork for themselves by including it as taxable wages.
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LilMama23
•19 Does your nursing agency make you prove you actually traveled to qualify for the per diem? My construction company makes us submit our hotel receipts to prove we were actually on location, but they don't ask for meal receipts, just hotel proof. I'm wondering if that's standard or if different industries handle it differently.
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LilMama23
•5 Yes, we have to submit documentation of our travel assignment location and dates, usually through our assignment contracts and timesheets that show we worked at the specific location. They don't require actual meal receipts either - that's the whole point of per diem rates, they're standard amounts that don't require receipt documentation. Different industries might handle specifics differently, but the basic IRS requirements for an accountable plan are the same: business connection (legitimate business reason for the expense), substantiation of time/place/business purpose (proving you were there), and returning excess amounts (if they gave you more than the standard rates). The hotel receipt requirement makes sense as it substantiates that you were actually at the work location, which is necessary for the per diem to qualify.
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LilMama23
2 Has anyone successfully gotten their employer to switch from a taxable per diem to a non-taxable one? My company is doing the same thing and I'm losing thousands in taxes. What's the best way to approach HR about this without sounding like I'm telling them they're doing their job wrong?
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LilMama23
•6 I actually did this last year! The key was framing it as a win-win for both the company and employees. I put together a one-page document showing how much FICA tax the COMPANY was paying unnecessarily by including per diem in taxable wages (they pay 7.65% matching on all those per diem amounts!). Then I showed how employees were getting hit with income tax on top of that. I brought it to our finance director rather than HR, since it was ultimately a money issue for the company. When they realized they could save thousands in payroll taxes company-wide by switching to an accountable plan, they made the change within a month!
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LilMama23
14 One important thing to consider - if your employer switches to a non-taxable per diem system, make sure they're not reducing your base pay to compensate! I've seen companies do this, where they say "your total compensation stays the same" but they shift more to non-taxable per diem and reduce the base salary. This can impact your reported income for things like mortgage applications, retirement contributions, disability insurance, etc. Just something to watch out for!
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