Dont understand Per Diem....

Do a search on the terms. It has been discussed many times and the information is there.

 

Here we go

 

basically they will take part of your pay and not tax it. You will have more income weekly and less gross yearly.

This will never equal the amount of Per Diem the IRS allows per day. A company usually figures out by load.

If you have the company Per Diem, keep track of what the Company shows and figure out the Daily rate you are entitled to. What the difference is, is what you still can claim on your taxes.

Look under Trucker Taxes... many threads on this subject.

 

Per diem, the company pays part of your wages as NON TAXABLE income, since it is a reimbursement for being away from home... you pay less in taxes all year long... you put more cash in your pocket.
It also benefits the company, as they do not have to pay the matching tax payments.
This reduces the amount you pay in total to SS and therefore reduces your future benefit from SS.

Down side, all those per diem payments are NOT considered income, and will not be considered when you apply for any loan.

Currently the max amount is $59 per day you are away from home overnight, which you may claim 80% as a tax deduction, if the company did NOT pay per diem.

As far as your question, not enough information provided... the answer will depend on what tax bracket you are in, and how much the per diem is, as each company sets the amount they pay.

 

It's a tax break for the trucking companies

It effects you by reducing your Social security income

when your old

 

It is basically the fact that you are allowing your company to take your road expense deductions. In exchange for that, they pay you a certain amount each week for your expenses. When I was getting it, it was adding anywhere from $100 to as much as $250 to my bring home. I just couldn't claim my road expense on my taxes.

 

I can give you a simple explanation. You get taxed way less for every night you are away from home. Kinda like welfare for hard working truckers. The downside is if you gross 60k per year, per diem makes it look like you made 40k per year on paper. But so what? Only broke people get loans (Dave Ramsey) and thats the only time that matters. You also have to itemize come tax time, but if you have tax software that is easy to do. I never get loans and I itemize already so I love per diem. It's like getting an extra $50 per day.

 

If you are in your 50's like me it wont affect your ssn... i checked into it with my accountant since my company does a .10 cpm perdium.

i still keep track of how much perdium i get each week and then clain the remainder at the end of the year.

some people get all upset because they dont get a big tax refund check at the end of the year because technically you already got it. My accountant says that you should only have enough held out to cover taxes anyway. Why let the government use your money all year long interest free.

 

Yes sir he is right. I never get a big refund, maybe 2 or 300 now and then. Id rather get mine in my paycheck, can at least put it into an interest bearing savings account.