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Solo W-2™ — Tax-free Per Diem and Auto Allowance

Great Tax Advantages and Higher Net Earnings
Solo W-2™ employees qualify for federally authorized per diem and auto allowance. Simplified expense reporting for work-related travel and out-of-town living expenses is one more way that Solo W-2™ gives independent professionals great tax advantages and higher net earnings.
 

Per Diem Greatly Simplifies Out-of-town Expenses
  The tax-free per diem allowance is only available to employees, and is not available to self-employed independent contractors, who must itemize every expense while traveling and working out of town.
 
 
You are eligible for a tax-exempt per diem allowance if you are working away from your tax home on a temporary work assignment that is contractually limited to less than one year.
 
There are no restrictions on your living arrangements or whether you actually pay for your lodging, meals, and incidental expenses. Per diem greatly simplifies the computing and reimbursement of travel expenses, which is why per diem is the preferred form of reimbursement for employees of the Federal Government.
 
You do not have to show receipts for lodging, meals, and incidental expenses if they are under the posted per diem limits for the locality in which you are working.
 
Per diem allowance is paid out of your division's revenue stream and is exempt from taxes.
 
Your Division Administrator will walk you through the process of qualifying for per diem and ensure that you receive the legal maximum per diem allowance.
 
The U.S. Government Services Administration (GSA) publishes the per diem allowances that apply in different locations and at different times of the year throughout the United States and elsewhere in the world.
 

Easily Qualify for Per Diem Allowance
  To qualify for per diem allowance from Solo W-2™ you must satisfy all of the following conditions.
 
 
Your work-related business activity is at least fifty miles from your tax home, and requires an overnight stay. The IRS code does not specify a number of miles. However, based on IRS rulings, Solo W-2, Inc. specifies a distance of 50 miles as a reasonable distance to justify payment of per diem allowance.
 
You maintain temporary lodging (apartment, hotel, motor home, etc.) within reasonable commuting distance of your client’s physical work site.
 
Your work at the remote work site is temporary, and has a specified duration of less than one year.
 
You have no intention, either explicit or implied, of working continuously at the same remote work site for the same client for a period greater than one year, including breaks in service of less than 30 days, or of establishing a permanent residence in the vicinity of the remote work site, or of becoming an employee of the client at the remote work site.
 
You have completed, signed and returned to Solo W-2, Inc. the Per Diem Application including all required supporting documentation.
 

Tax-free Auto Allowance
  An auto allowance reimburses you for the anticipated monthly cost of leasing and maintaining an automobile while on extended out-of-town assignments. The intent is to simplify expense reporting and record keeping.
 
 
In general, if you qualify for per diem allowance you may also qualify for an auto allowance. Auto allowances are paid out of your division's revenue stream, and are exempt from taxes.
 
Typically, all mileage and transportation expenses incurred while on a remote work assignment, including personal travel, is reimbursable as an auto allowance or as a straight mileage allowance.
 
Your Division Administrator will help you download and complete the Auto Allowance Worksheet and walk you through the process of calculating your auto allowance.
 


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