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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 13174
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Im an independent contract (per my contract with an agency).

Resolved Question:

I'm an independent contract (per my contract with an agency). My agency pays me a fixed per diem rate everyday without returning any receipt (aside from my hourly rate). I live and work in the same state (AZ). My job is about 65 miles away from my rented condo. I'm told by my agency that my per diem rate will not appear in my gross earnings in my 1099. Will I still need to pay tax on this per diem rate (that is not included in my gross pay in my 1099)?
Submitted: 9 months ago.
Category: Tax
Expert:  Megan C replied 9 months ago.

Megan C :

Thank you for your question. My name is XXXXX XXXXX I will be happy to assist today

Megan C :

The per diem you are speaking about would be taxable, but you could deduct of course your expenses incurred such as mileage, meals with a business purpose, business travel, etc

Megan C :

You will need to verify that the amount is not showing up on your 1099, and then add that to your gross receipts on your schedule C

Megan C :

See item #6 on THIS IRS PUBLICATION

Megan C :

Per diems are taxable when a flat amount is given, but no expense report is required.

Megan C :

Do you have further questions about this matter?

Customer:

I'll be able to deduct my gas as part of my expense? Can you give me an idea what else I can deduct as part of being an idependent contractor?

Megan C :

You can either deduct the actual cost of keeping your vehicle up, or the standard mileage rate. Over time, the standard mileage rate will give you a larger deduction.

Megan C :

You can deduct any cost you incur in relation to your work as an independent contractor. Ordinary and necessary expenses

Megan C :

You cannot deduct your meals, unless they have a business purpose. Grabbing lunch between clients would not be a business purpose, but taking a client out would be

Customer:

Do you recommend having an expert do my taxes this year (this is my first year as a contractor), i've been doing my taxes for a while now from w2's using turbotax

Megan C :

You could do it yourself using TurboTax, but I would have a professional do it your first year at least so that you can see which schedules are necessary. It shouldn't cost you too much, maybe a couple hundred dollars

Customer:

Thanks

Megan C :

You're welcome. Is there anything else I can assist you with today?

Customer:

No thats it. thanks again

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 13174
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 8 other Tax Specialists are ready to help you

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