I printed the report, now what?
Now that you have entered all those overnights, what do the report numbers mean and how to use them....
If you're using TurboTax, check out this video on YouTube.
1. Select the Reports tab at the bottom of the app.
2. Select the report year you wish to receive via email. Notice the email address listed at the top of the list. That is the email address your report will be sent to and is the same as your login email address.
Here is a sample of a portion of the detailed report:
(only last two overnights for the year are included here for clarity in discussing the summary of the report)
12/30 - Fri - PHOG - $134.00 - Kahului Airport
....tax record: ISLE OF MAUI country:HAWAII
....wikipedia link: http://en.wikipedia.org/wiki/Kahului_Airport
12/31 - Sat - KSJC - $64.00 - Norman Y. Mineta San Jose International Airport
....tax record: Sunnyvale / Palo Alto / San Jose State:CA
....wikipedia link: http://en.wikipedia.org/wiki/San_Jose_International_Airport
Overnight Count: 145
Days of PerDiem: 172
# of Trips: 27
Domestic Overnights: 104
International Overnights: 41
Total PerDiem Exemption at 100% for all Days= $13348.00
Total PerDiem Exemption Loss From Partial Day Calculation @75% = $939.75
Below is the total exemption that is generally accepted by the IRS using the 3/4 day rule or also called the 75% rule that is entered on Line 5 column B of form 2106. Reimbursements by your employer for meals and expenses are entered on line 7 of form 2106. The amount your employer paid is many times found on your paystubs as non taxable meal reimbursements or sometimes in box 12 of your W-2 coded with the letter 'L'. Check with your employer to verify you are in fact looking at the Meals and Expenses reimbursement total before filling in Line 7 of form 2106.
Total PerDiem Exemption based on 75% partial day=$12408.25
The total from the report is the summation of all the federal maximum deductions of all the entered overnight cities. Tax code authorizes the deduction of meals and entertainment expenses from your taxes without supplying a receipt so long as you stay below the maximum deduction amount each day. As an example, if you stay overnight at an airport with a federal allowance of $70, and the company gives you $40 towards meals & expenses, you have $30 remaining that you can use to spend on meals and expenses that can be written off on your taxes without keeping a receipt. This is just a simple example and the recommendation from the IRS is that you consult with a certified tax specialist to understand any implications all the rules may have on your specific tax situation.
The very last line in the report example above shows $12,408.25. This is the total *maximum Federal deduction that is used on your taxes on form 2106. (in 2016 it was line 5) On your taxes you will also supply the amount of money the company provided you for the purpose of perdiem. In many cases you can find this amount as a line item on your last paycheck of the year. This information is also entered on form 2106. (in 2016 it was line 7). Also on the 2016 form 2106 line 9 column B has an important distinction. If you are working under DOT rules, you get to multiply your deduction by 0.8 instead of 0.5.
Instructions on filling out that form can be found at: http://www.irs.gov/instructions/i2106/ch02.html
* maximum deduction cited is predicated on the standard 75% or 3/4 day rule. Some people feel it is appropriate to use 100% of the federal maximum even on first and last day of a trip which in the case of this report calculates to $13,348. If audited, the IRS will require you to justify why you feel that 100% is appropriate. Consulting with a certified tax preparer is highly recommended.