I understand that Per Diem is an allowance given by employers to employees to cover meals, lodging, and incidental expenses on business trips away from home. Any money issued by the employer that was not spent or cannot be accounted for is required to be repaid back to them. In order to report the Per Diem, it is important to determine if the allowance is greater than or less than the Federal Per Diem rate. So, if the total amount paid by the taxpayer is less than the Federal Per Diem Rate, no amount will be reported on the tax return. In the case, the allowance is more than the federal rate, this amount will be included up to the federal rate in box 12 of Form W2. This will be reported as if it is wage income. As it said in the book, if
