Per Diem: So what is the scam?

I should have asked the question b4 I signed up for it #### i widh I knew about this site b4 i started

 

Per diem is a tax reak given to truck drivers for meals etc. This does not get taken out of your gross pay. It does however increase your net pay. What you gross for the year is what you gross for the year. This has nothing to do with you getting less back in time for social security. It's set up as a convenience for drivers. I'm sure the company gets something on their end but my concern is my paycheck. I'll either gut it back now or get it back on April 15th. The choice is yours to make. I'll explain in greater detail if RickG wants to throw his 2 cents back in here.

 

Close, kinda, but Not !!!!!

 

That was helpful. Enlighten us then.

 

Per diem is not pay . It's reimbursement for meals . You take less taxed compensation so less is credited towards Social Security .
http://www.landlinemag.com/Archives/2004/Nov2004/bottom_line/its_your_business.htm

 

If you use TurboTax or something like that there is a space on the form that asks if you were eligible for meals and how much you received . Carriers almost always underpay . If you are paid per diem per mile do you get any for days spent on restarts away from home ? The form allows you to deduct additional over what the carrier paid .

 

I knew it was too good to be true they make it seem like you get alot of money back

 

The problem is carriers do not pay fully what you are entitled to because they would be penalized if they overpay . If someone has enough other deductions to make it worthwhile to itemize rather than take the standard deduction they can add the additional amount they are entitled too . If they take the standard deduction they lose that amount .
The standard deduction for 2010 for a single person is $5700 . Suppose your employer paid $7,000 in per diem but your days out showed you could deduct $8400 . Unless you have another $4300 in deductions you lose out .
If you don't get per diem from the employer the meal deduction alone makes it worthwhile to itemize . That will also allow you to add items like tools , phone , work clothes , etc. that wouldn't total enough to be worth claiming without the per diem .

 

Here's how I run. I carry food from home to defray daily expenses. I keep reciepts for everything I buy on the road that is business related and mark each slip with the bill of lading number for the particular load. I keep all log books and make sure each load B/L no is marked. At tax time I add em up and deduct either that amount or the standard deduction, whichever is greater. Remember, you can't deduct for trips where you leave and come back the same day.