Per Diem vs standard deductions

If you're 1099, the per diem is a business expense on Schedule C, as mentioned. Then, on the 1040, you still get your standard deduction/exemption. I don't know how it works for W-2 employees claiming per diem. My guess is since your don't file Schedule C, it's either per diem (which is probably higher if you're out all year) than the deduction/exemption.

I know every year, my CPA has per diem on Schedule C and we still get the standard deduction/exemptions for my wife and I.

 

If you're a 1099 contractor, then it goes on Schedule C. If you're a W-2 employee it is figured with Form 2106 and goes on Schedule A (itemized deductions). If, as I believe the OP was, you have both W-2 and 1099 income I suppose it could be both - the days you were a 1099 contractor would be reported as expenses on Schedule C and the days you were a W-2 earner would be on 2106.