Per Diem is Great...

Ju Ju,

This affects your drivers soicial security wages, the contributing factor that will determine what they will get when they retire (providing its still available). Its saving you your portion of their social security tax and it puts more money in their pocket in the short term (on a weekly, but its short term thinking). Its better to allow the driver to take their own deduction at the end of the year. That way their soicial security wage caulations are not affected in the long term.

I'm not a tax advisor, and there maybe some situations where this makes sence.....but I will be darned if I can find a situation where it is good for the driver. Its great for the company, because it reduces your individual employee tax liability, for a portion of their wage. I dont think your drivers asking for this totally understand what this is all about.........I know some people think it acts like a cafateria plan, where they are getting tax free benifits....and that just is not the way it is.

I think if you search on Google, you will find a court case of a trucking company that did not have this program structured properly, and they were fined by the federal government to the point where they just closed their doors. We are not to post links here, but if you do a simple search you should find it. If I interperted the court case correctly, they were taking the full daily per diem off the top of their drivers wages pretax........and they were ordered to pay all that tax money back plus fines.

 

Thank you Jonny1, I believe you are correct.

 

I guess my take on this is that for a new driver, if it helps the company, we should probably take it for at least the first year to get the experience we need. If you don't take it (knowing that it helps the company), they are going to get you somehow (i.e. give you less miles, etc...) I understand it lowers unemployment benefits and social security, but I'm 31 years old, so I have a while until i can retire and I"m sure by then SS won't be around anyhow, so that isn't really a big deal to me. I'm going to take the per diem at the company I am going to just because I don't want to upset them. I'll see how it turns out for my situation and after a year I can re-evaluate it and see if I want to stay that way or not. I've worked for enough companies (non-trucking) to know that if you upset the company you are working for, they will somehow get you back and the few dollars that I may or may not lose by taking the per diem (I'm not an accountant, so I don't know all the tax laws and stuff) is just not worth it to me to lose my job or something else. Plus, I like to have my money up front, especially in these times.

It would also seem to me that if you are getting taxed for a lower amount, you are also paying less taxes out of each check so in essence you would get getting that amount per check as well instead of having to wait until tax time to get that refund back. Just my synopsis, but like I said i'm not an accountant. This may not work for everyone, but I can't see where it would hurt me in my situation. I wouldn't file unemployment anyhow, I would find another job, because I can't stand not working, so that isn't an option for me either. Just my $.02

 

In the long run it's going to cost you to do the per diem as you will have to pay for extra time for your payroll departments wages for the extra work.

And as stated above these drivers do not realize what this will do to them down the road if they become unemployed and need "all" of the wages they made to calculate the unemployment they will get and/or workers comp if they are hurt on the job, then there is their social security after age 65 (if that's still in effect !) Less total wages means less total benefits paid by SSI, Unemploymnet or workers comp.

Per diem taken out of the pay check only hurts them in the long run even though it might buy a few extra beers a week! It's not worth it for the employee.

 

"Most" companies do not require you to "take" the per diem! ONLY those becoming or who are bottom feeders!

If you are given the option to "take" their per diem REFUSE it! I've posted this in all of the new per diem threads that come up and I really wish the mods would lock them all except for one to save some band width and direct everyone to the only one with the good information!

Here's the BAD part about per diem. If you are young, you haven't built up much in your social security, by having this "scam" in place and being forced to take it or if you studiedly do decide to take it you will REDUCE your SSI payments in your later years unless you can get a good CD or IRA and keep paying into it!

Also, if you get injured on the job and have to collect workers comp your payments will be reduced

And the same goes for unemployment if you loose your job. Yes LESS money paid to you.

Or if you go in for a car, truck, home, business or personal loan. LESS money on the W-2 form means LESS money you will be able to borrow as you well know the bank looks at your GROSS and when these bottom feeder companies TAKE away from the GROSS! Every thing I mentioned will be LESS!

That means what COMES to you in any of the events I mentioned above! IF you think you so desperately need that cash NOW then by all means sign on the line but please don't whine to us when you realize that you actually DID NOT make what you thought you did, not to mention this scam might wind up becoming an IRS problem for everyone down the line!

The new rate is for 2009 is 80% of 59 dollars a DAY you are out on the road. You will use your log book as proof and to figure out your days out from you domicile or yard. if you figure you WILL be out at LEAST 260 days a year that's, 5 days a week then you do the math!

I just left a job due to a medical, and the truck owner on my last paycheck, without my approval decided to put me on a per diem rate and I was PO'ed to say the least. I only got for 7 days out $223 dollars "per diem" and that's NOT what I would have gotten at the end of the year! GET IT YET? If you just like to get screwed go ahead, but me, I really like that end of the year raise!

Thanks to President Bill Clinton we LOST a big chunck of the per diem pay! He cut it back because the per diem is also called the 3 martini tax and the Dems fell all over it and approved it! When we finally got it thought that thick morons head what he had done to us REAL working crowd (yes all of you truck drivers taking a lunch at those over priced 5 star restaurants and claiming it on your taxes) we got it back but a little bit at a time so as NOT to cost America too much!! I lost over a thousand dollars that first year in my tax return! Understand yet?

Now, if they tell you to save all of your food, book entertainment expenses receipts and refund you for them then you might want to go for it! LOL That I would want to know about!

God gave you a brain. What you do with it is your gift to God and the rest of us!
Good Luck,
Rollover

 

I, for one, understand exactly what you are saying and as I stated, I am against the per-diem for what I know about it. However, being a new driver with no experience, since it helps the company, if new drivers don't take it, we could be screwed in the process. After a year or 2, i'll review what changes I can make, but until then, i'll take whatever they give me. For drivers with experience, I would not suggest taking this route unless it's something they decide to do after researching it thoroughly.

 

You guys that are saying that you cannot take your perdiem at the end of the year if the company gives you some of it are wrong.
You can take whatever you could have claimed above what they gave you.
No company is going to give you the full ammt.

Lets say at the end of the year they paid out 8,000 in perdiem.
But when you do your taxes you calcualte it out, and you would have gotten a deduction of 10,000.
You can still claim the other 2,000.
But no. If you are taking the 80% of 59.00 a day you cannot itemize your expences for food. That is what the 59 a day is there for. Also, if you are a husband wife team filing jointly.
You both get to claim the 80% of 59 dollars a day. This is a massive deduction.
I would take perdiem if it was on top of a good rate. Yes this would basicly be a raise in pay, but it would not be taxable if it was paid as a reembursment.
My last company did this, though not in any real taxable way.
Each driver got an advance at the beginning of each week. To pay for scales, tolls, ect.
Each day out the company would give us 3 meals a day at 5.00 a meal and 12.00 for staying away for the night.
At the end of each week we would get all our recepts together for tolls, scales ect. Add those up, plus meals and overnights. This would always add up to more than our advance.
The office would keep track of this all month, then the first week of the next month the owner of the company would give you cash for whatever they owed.

No, I would not suggest for companys to do this. I am not sure if he even claimed the payouts anywhere. He just did it to help out his drivers. My advances would almost always cover my tolls and my food expences while I was on the road. When it did not I had no problem paying out of pocket for them. When I got my cashout the next month it was always 150+.
It was a big help to us drivers. We had 0 turnover. At least till the economy went down to the point he had to downsize. No drives ever quit lol.
And the money he gave for this was not in our pay, and not reported in our taxes.

If you have drivers really want some perdiem then offer them some off their milage rate. This will save you money and give them more pay a week. Just make sure it is optional, since those of us with brains would never take it. Since it is lowering our income.

 

Well your accountant will have to figure it out as someone will screw it up! If they don't give you everything you earned then when you give your accountant your actual days out count they can figure out if you got the full deduction and can file the correction. But thats another freaking extra page and MORE money out of my pocket for them to file that extra page!

No, the ONLY reason these bottom feeders are doing this per diem is to reduce the amount of taxes they have to pay per week or pay period. I expect the IRS to fall on these companies who are trying to do a "legal" tax dodge. And what worries me is what happens if the company folds and the IRS wants their taxes. Who do you think they might come to for them? I don't know about the rest of you but I can't afford to write the IRS a check because some bottom feeder wanted to stay rich until the end!

 

Does the deduction apply the time you're 34 hours off if you're stuck at truck stop for the weekend and not on duty?

 

Perdiem is for every night you are away from home with the company.
Though if you request time off in a location other than home that does not count eather. Time spent at a truckstop on a manditory 34 hour restart counts if it is away from home, and so does being stuck waiting for a load on the road. This is why drivers need a physical address for a home address and not a PO Box.

So if you are on the road 300 days a year, you claim 300 days X $59.00 = 17,700
17,700 x .8 = 14,160

This is your standard perdiem deduction for the year. You can itemize also, but if you do that you need all recepts and is too much of a pain to me to calc that way, and will get looked into more. Plus I never spend that much a day on the road for food ect.