Report taxable income from employee meal or lodging benefits as wages on a W-2 form. Treat income from employee meal or lodging benefits each as per diem expenses. All employers must report to the Internal Revenue Service in their tax returns how much per diem the business paid to its employees. Keep in mind that you can reduce the business’s taxes if you write off some of your per diem expenses. Most of the per diem that you pay to your employees is tax deductible. Make sure that you know what you need to report and what you should write off before filling out and filing your annual W-2 forms.
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