Is Per Diem Taxable? How Is Per Diem Taxed?

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Per diem reimbursements are generally not taxable for employees as long as they follow accountable plans and submit proper expense reports.

The IRS sets per diem rates, and any amount exceeding this rate may be considered taxable income for employees.

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Employers can deduct 50% of per diem expenses for meals and incidental expenses, and lodging expenses are fully deductible.

Self-employed individuals can't receive per diem payments but can deduct up to 50% of their business trip expenses.

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Seeking advice from financial advisors can help individuals navigate tax implications related to per diem and better plan for tax season.