I am wondering if the lodging stipend and meals and incidentals stipend are together in one rate or is it separate?
For example, let's say according to the GSA website Oklahoma City lodging rate is $95 and then $59 for meals and incidentals. What I am not understanding is if the $59 for the meals and incidentals is included in the $95? Or should the $59 meals and incidentals be on top of that $95 for lodging?
Thanks in advance! This may sound simple to some, but when you're still learning these things it isn't always so straightforward.
Google GSA rates for any location. There is a separate maximum lodging and M&IE rate. Mind you, an agency does not have pay the maximum or any tax free money at all.
If an agency just quotes one number for both, the IRS guidance is that M&IE is 40% of the total. The M&IE number is important because you can deduct the max on your income tax return, less the amount paid by your agency.
The housing number can be occasionally useful in the rare case where your receipted housing cost are higher than your lodging reimbursement. The most common place this happens is seasonal assignments where the hospital is your employer. They may give you a separate housing stipend but it is taxed as ordinary income.
It is generally better to get the highest agency provided stipends rather than itemizing.
All these comments are predicated on you working away from a legitimate tax home of course.
Thank you very much. Your explanation was very helfpul. I appreciate you taking the time to respond.