Forced Per Diem... Theft?

Not to mention what disability or workmen's comp uses as well.

 

Being an accountant in my past life I assure you the IRS is more generous with per diem than your company claims to be. When the company does it-it is in their favor and has little to do with increasing your wage.

 

I also was and still am an accountant in the past life.

I know a company does not provide anything to the driver that costs them as well.

 

Danc,

There is no need to be rude. I am more than willing to admit that different numbers are used for different applications. This discussion prompted me to go back to my most recent mortgage and review the documents. Both the originator and the broker used my gross income. My income tax forms were never used. However, my previous mortgage required the submission of my tax forms and a 4506T which provided tax information so I can't determine which numbers the originator used. I would be willing to bet it was my net.

As I stated in my previous post, I don't know where the perdiem fits in but your social security is taxed before the health insurance and 401K comes out while your income tax withholding is calculated after these are subtracted.

How do you get by on 31K? All I owe is mortgages, utilities and car insurance and 31K wouldnt cover that.

 

The problem i have with per diem is: the company's charging the driver 1.5-2 cents AVG. out/off of the driver's per mile pay. ADMIN. FEE, BULL......

 

Such negative attitude towards per diem pay. Gross 31K, paid taxes on 20K, saved you $2750 in taxes that went straight in your pocket. SS is a rip off, and will soon be bankrupt and gone. If they only reduce your mileage pay by 1 cent per mile, you come out ahead.

As far as qualifying for a loan, if you can't afford it on $20K you should not be purchasing it, plain and simple as that is your actual income.

 

One additional thing to consider.

If your company has the per diem and a 401 K and or profit sharing plan, it is based on the reduced amount, since it is classified taxable wages.

 

LOL

And this year I shall be getting back everything I paid in taxes and much much more! You can't take a per-diem if the tires aren't rolling, every day I'm out, I can take it.

Keep taking the company per-diem!

 

This is based on Single claiming zero. (Per Diem IS EXEMPT from SS and Medicare tax. Bottom line is that if you take per diem pay for a lot of years it will effect your ss benefit.) Remember, if you can't come up with more expenses than the personal deduction ($11K or so for a married couple, higher for people with kids) then you cant claim per diem anyway. This is why it is so important to project it out at the beginning of the year. If you can't itemize it is lost money that could have been in your pocket. On the other hand, if you can itemize you probably want to stay away from company per diem.

The per diem question can't be answered simply. There are too many variables. If your total income is $35K to $40K a year, every penny counts and you owe it to yourself and your family to take the time to think it through and calculate the difference. If you are an O/O then it's a no brainer. You probably come up with enough deductions in the first quarter or less. If you are a company driver that files for EIC every year or rents your home rather than paying a mortgage, I imagine it's a safe bet that per diem is right for you.

Don't take anybodies word for it. You are the one who has to pay your rent and buy your groceries.

Simople calculations:
(No Per Diem)
.35 per mile
2500 miles X .35 per mile = $875 - FITW $125.33 nets $682.73 SS withholding is $54.25

(With Per Diem)
.33 per mile .28 straight .08 per diem
2500 miles X .28 per mile = $700 - FITW $81.58 nets $584.87 Plus (SS $43.40)
2500 miles X .05 permile = $125 (per diem) nets $709.87

NET Annual income
$27.14 difference per week or $1357 difference for a 50 week year.
$35,493.50 with per diem
$34,136.50 without per diem

GROSS Annual income
$35,000 with perdiem
$43,750 without

Tax witholding came from paycheckcity.com. You can calculate your paycheck at that site if you have a normal salary or hourly job. Truck drivers paychecks aren't that simple.

 

Per Diem is not income. It does not count as income, be it gross or net.
Company Per Diem is supposed to be (and on paper is) a repayment for your expences.
Companys like Marten, Swift, Central, and many many others that force drivers to take this repayment as part of there pay is the issue.
Central starts drivers at .29 cpm. .08 Cpm of that is Per Diem. So in reality they are only paying there drivers .21 cpm. Since you would have gotten that money at the end of the year anyway.

As for tax filing. I get my full Per Diem every year. Even when I was working for a company that paid it. I would just figure out my yearly per diem, subtract from it what had already been re-embursed by the company and take the rest on my taxes. They don't claim that what they are giving you is the full ammt.
I think that if the company wants to do Per diem it should be on top of a normal pay. So if the company pays .35 cpm and wants to give the drivers .10 cpm for per diem to make it easer for them on the road that would be great. But as it is now it is just ripping them off. Counting it as pay.
If they can advertise it as part of pay, then the IRS should be able to sue them for that ammt for there drivers and get the company for back wages and taxes.
I have a feeling that this will in fact happen in the future. Social security and the IRS will eventually catch up with the companys and grid them for the money they want.