working per diem

[m w <mwuc -at- yahoo -dot- com>]

If someone has a moment, could you please explain to
me how the per diem method of pay works?  How does
this affect me from a tax standpoint?

I've been told that I don't have to pay any taxes at
all on per diem pay, but I'm finding that hard to
believe.  Somewhere down the line, don't I have to
pay state or federal taxes on all wages?

I'm looking at working a project in California for a
few months that pays partial per diem hourly, and
partial "regular" hourly, but keeping my
permanent residence here in Iowa.

Thank you for your input.

Regards,
Mike


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