Per diem questions.

Discussion in 'Experienced Truckers' Advice' started by Infosaur, Sep 22, 2014.

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  1. Infosaur

    Infosaur Road Train Member

    1.) is per diem set by the individual employer, or is it set by a government agency (ie. the IRS)?

    2.) if it's set by the IRS, any chance there will be a cost of living increase anytime soon?

    3.) if set by individual employers, what are most people getting?
     
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  3. xsetra

    xsetra Road Train Member

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    Per diem for what you can deduct on your income tax return is set by the IRS. You can use either a local allowance or the National allowance. Local is set at different rates for each City/region. Higher rate for more expensive cost of living areas. Chicago, New York, LA. The national rate is kind of an average daily rate so you don't have to keep track of each city for each day you want to claim a per diem.
    Per diem for the amount any company pays you does not have to be the same as the IRS rate. It can be higher or lower. Remember what ever you receive is classified as a form of income. Everyone's return is different.
    I was taught to calculate the days that I can receive per diem is: Because I run OTR I can add each 1/4 day or portion of, that I am gone from home, to come up with a total day count. Example if I leave home at midnight, That is the start of a quarter. If I log leaving at 11:45pm that would count as 2 quarters. 1 portion of a quarter and the current quarter. That is as long as I am gone from home that following night. If I come back home within 24 hours I can not claim per diem for that day. So if you are home any portion of a 24 hour day, you can't claim a deduction for that day. Even if the 24 hour cycle is in 2 calendar days.
    To add; the day is divided into 4 quarters. Midnight-6 am, 6am-Noon, Noon-6pm, 6pm-Midnight.
    That's the way my tax accountant explained it to me.
    Good luck
     
    Last edited: Sep 22, 2014
  4. kemosabi49

    kemosabi49 Trucker Forum STAFF Staff Member

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    Per Diem offered by your employer can be whatever they choose to offer. If you take it you cannot take the per diem deduction from the IRS on your taxes. It will lower your taxable income as it comes off of your gross pay before any deductions are made. So you may take home more. The cons to it are it lowers your income as far as lenders are concerned. If you go to buy at home and/or car etc., you may not show enough income to qualify. It also lower your Social Security income. For the company, it lowers the amounts thay have to pay for your FICA, Medicare, Unemployment Insurance and, I'm sure, other things. It may work out well for some and not for others.
    The standard rate for truckers is 80% of $59. a day for every full day you are away from home. My CPA used to deduct 1/2 day for the days I left and the days I returned. At the end of the year this can be a substantial amount. The $59. amount has not been raised by the IRS for a few years now and there is no telling if/when it will go up again.
     
  5. Powder Joints

    Powder Joints Subjective Prognosticator

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    Companies offering you Per Diem are not doing you a favor.

    It saves them money / Costing you Money for instance, Social Security, they pay in less.
    is just one of the ways. they are ripping you off, also decrease your reportable income affecting your credit and ability to buy a house, car, etc..

    If you have a disability claim they win again since your payment is based off income prior to the injury.

    Most of them actually charge you a fee for ripping you off. If you work for a company that only offers this as a part of payroll, leave as soon as you can.

    Per Diem works out great when used at the end of the tax year, but nt as these companies sell it.
     
  6. MysticHZ

    MysticHZ Road Train Member

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    You won't get an answer here ... you have three responses with enough half truths and outright error to make them essentially useless ... which is typical of the herd responses you will get on this site regarding this subject.

    Do some direct research at irs.gov and Wikipedia ... you'll learn more.
     
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  7. Infosaur

    Infosaur Road Train Member

    Close enough. Close the thread.
     
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  8. walterjacobo15

    walterjacobo15 Light Load Member

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    Set by IRS. It does adjust from time to time, for now it has been 59$ (80% DEDUCTION) for 5 yrs. Usable ONLY if you spend the night away from home. Keep logs for 3 years as proof.
     
  9. MACK E-6

    MACK E-6 Moderator Staff Member

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    Closed per OP's request.
     
    123456 Thanks this.
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