Can you tax per diem given to a military contractor in Kuwait?

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Miss_Michelle

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My husband who is a military contractor stationed at a base in Kuwait, was just informed that if he had been there physically present for 1 year that his per diem would be added to his income, so when he files his taxes the first 85,000 is still tax free but anything over he has to pay taxes on wont this put him in a much higher tax bracket? First question is can they do this? and what should he do as far as claiming deductions?
 
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