can some one please explain per diem pay??

OK, I have a ?... One of the companies I am looking at will pay .10 per mile per-diem. If I average 2000 - 2200. 2000 miles a week is right on the max deduction, and 2220 is over that amount. Should I still consider per-diem. I have enough deductions to itemize.

 

so basically .23cpm + .10cpm per diem. is that right ? so on 2000 miles that is 200$ untaxed a week times 52 weeks is...10400$ of reportable income and another 460$ a week before taxes which is 23920$ before taxes. that seems like alot of untaxed perdiem. per diem is so hard to understand. it seems nobody really understands it or can explain it. from what i understand and my exp. with it. i can have the money now and pay taxes on the p/d in january or don't get it and get it back instead in jan. it's just a personal question and what you want to do. it has messed me up on taxes before. if you have the write offs to do it then it might not be a big deal.

 

one thing to consider in this DS, IF you take the per-diem pay you will be paying less into your social security which could hurt your benefits one day. also, it will make your gross income appear lower, which in turn may keep you from being able to buy the house you want ETC.

 

Thanks Pat, will look at it more, as far as the house, don't think I am moving out of this one.

 

Nice to see how it works on the per mile scale. But I will be going into a salaried postion to start. still will be averaging around 2000 thou a week on a dedicated regional run. So, is the figure the same. 75% of 52 per day on the road away from home?

 

Just something for you think about. If per diem is such a great money maker for the drivers, do you really think the company would be offering it?? The more you get paid in per diem, the more a company can put in it's pocket due to not haveing to match SS/witholding.
IMO...stay away from per diem unless you already owe the tax man a huge chunk of $$$$ for something else.

 

Well I currently take a big hit in the way of taxes, but that will change in a few months, when I am making less. A salary position should have no affect on per-diem.

 

Hubby gets per~diem and as of yet it has caused no problems, we just redid our mortgage (yeah, 30 year fixed) and it didnt hurt one bit, as it is listed on the pay stub, when we filled out our income tax the per~diem paid was LOWER than what the fed. allows per day as an exemption so that worked for us too......

Per~diem is not a all bad thing, yes less is paid in by the company on your SS etc, but when you have no dependants and all that jazz it works for us, I think you need to look at it on a case by case basis.

 

Luvmyhubby, let me ask you, if the per diem pay you received exceeded the 75% of $52/day away from home limit the fed allows... wouldn't you just be responsible for the amount over that limit. And have it taxed as ordinary income? I mean, going over the limit wouldn't be a bad thing, would it? Or maybe the 75%X$52/day isn't the "limit" of which you spoke?

 

I think it depends on how much per-diem the company is paying. The company I am looking at pays .10 a mile, so it puts you right on the edge or slightly over the max of 75% of $52 a day.