Per Diem: So what is the scam?

Good question i really dont fully understand it but i signed up for it

 

There is an allowable deduction for per diem . If a carrier pays per diem they get the deduction and you get less gross income .
Say you earn $50,000 a year and $5,000 of it is per diem . The company deducts $5,000 . Your earnings are shown to be $45,000 . That means less is paid toward your Social Security and you will collect less when you retire or are disabled . If you apply for a mortgage a $45,000 income will not qualify you for as high of a loan as a $50,000 income .
If you don't have per diem deducted you show the full $50,000 income but you get to claim the full $5,000 as a deduction on your tax return getting the same tax savings you would get if the employer deducted it .
But there is more to think about . That per diem amount could put your itemized amount above the standard deduction . That would allow you to claim small items like tools , work shoes , office supplies , etc . you couldn't claim with the standard deduction .

 

One way to start an argument on boards like this, over the CB, or in a group of truckers is to bring up Per Diem.

For the company it is a very big advantage. I don't fully understand it so I am not going to embarrass myself.

For the driver it is more of a personal situation and depends a great deal on your tax situation. What I've told people is try one for 6 months and then the other for 6 months, at tax time see what it does to you. There are tax advantages and disadvantages to each of them, talk to a tax preparer (not to a bunch of truckers). Personally, cash flow is more important so I have gone with no per diem - larger pay check.

BTW, i've tried it both ways.

 

O.k. , I'll try it this way . If your employer takes out per diem you might take home another $40 a week . If they don't take it out you'll get $2,000 more back on your tax refund when you claim it then .
But as I said earlier your Social Security income will be based on your gross earnings . When per diem is deducted it will lower your gross when you collect Social Security or disability if needed .

 

I get it, I get it thanks.

 

You can also look at it this way: Uncle Sam will give you a deduction of $59 a day every day you are out. That helps you reduce your taxes at tax time. (KEEP YOUR LOG BOOKS!)

The bottom feeder company will pay your per diem PER MILE! If you are lucky enough to get 3000 a week times say .10 a mile it's should come to $300 a week added to your pay check. BUT most of these companies are also CHARGING you for this privilege. I've heard of .02 a mile so that turns that $300 into $232. IF you get 3000 miles a week!

My accountant told me that as I pay PER PAGE for everything that she files for me it would cost me more because she would have to figure my miles that I was paid per diem then calculate how many days I was out and figure out what was owed to me because you will NEVER drive enough miles in a day to get what the government would give you! I would rather get my total tax bill reduced at the end of the year than get ripped by this BS per diem pay! Just ask your company instead of them figuring it out per mile if they would instead pay you $59 a day and watch them ROFLTAO at you! OR ask them if you can try it for a month and then opt out. They'll come up with some BS that they will treat it like your insurance and it can ONLY be done once a year! Yeah right, BS!

NOW when it comes time to say injure your self on the job and get workers comp you will NOT get what you would have if the bottom feeder had not taken the per diem out BEFORE taxes! Workers comp is actually what you paid in taxes over the year prior to the time you got injured. Workers comp sucks anyway but this makes it worse for you BUT helps out that company because it is now not paying as high a payment out and the same thing goes for unemployment if you get fired! Less gross on your paystup means less UE when you most need money to pay bills!

The next WORST thing that this BS ripoff does is it hurts your social security when you retire as you didn't show what you really made. Less gross means less SS when you're to freaking old to work! Also when you go to get a loan from a bank or whoever, again your gross is lower and affects what the bank could have loaned you.

Now, as to NOT being able to claim items, you can still claim things OTHER THAN food and hotels/motels which is what the per diem is for. Such things as work shoes, uniforms, gloves, your "office" supplies, and work related equipment needed for your job and other expences that the company refuses to pay . Per diem was mainly known to the business crowd and the rich as the "3 Martini Lunch" deduction that dumb assed Clinton and the Dem's got all upset about years ago and took it away not thinking or knowing that truck drivers took the same deduction and we got screwed and it took some fighting to get it reinstated!

Now if you want, instead of counting your days away from home you can keep all of your food and motel receipts but that becomes a PITA and actually might not equal the deduction IRS gives! It's easier to count the days!

Look at it in another light. What trucking company is going to do EXTRA work to "benefit" it's drivers? Now does it sound like a good deal?

The ball is now in your court. The BEST thing I recommend for you to do is ask your accountant which is the best for you. I DO hope you have an accountant that knows and understands trucking! Don't always trust what you hear on the CB or trucking forums! LOL