Per Diem: So what is the scam?

Be glad he is just paying tax on it instead of having to return the excess to the carrier .

http://www.irs.gov/publications/p535/ch11.html
The IRS does allow companies to pay per diem per mile . This simplifies it for their bookkeepers . The IRS allows per diem by day only .

http://tinyurl.com/yda5jkt
So drivers are allowed 80% of $59 ( for Canada ) or $ 47.20 a day . Multiply his daily miles times his rate and compare it .
O.K. I'm confused . You say he started in June and got $112 a week . The amount of $2930 would be the total of about 26 weeks at $112 a week . $112 divided by $47 allowable a day is less than 3 days . 9 cents a mile times 2,000 miles would be $180 a week . Divide that by $47.20 and it's still less than 4 days a week . It would be well worth the money to talk to an enrolled agent or CPA .

 

Thanks for the reply.... But unfortunately I still do not get it...But You helped .....

In either case for it to be coded excessive it seems to me that his compensation would have to work out to more then 47 bucks a day away from home ... if it was $50 the $3 would be excessive not the entire amount...

Basic Math:
$2930/26 weeks on this job = $112.00 a week being considered excessive...
Now since he averaged the same (???) $112.00 a week per Diem then every single penny he was reimbursed was coded as being excessive...????

By the 15th of April I may have this figured out BUT I have to wonder if they coded that box 12 wrong...and this was what they paid him towards his out of pocket expenses...

Bob G,

 

I'd say it was coded wrong and they underpaid him . He should count up his eligible days from his log book , multiply it by the daily allowance and see how much more than $2930 it is . He can claim that additional amount plus per diem with the other company that didn't deduct it .

 

Just FYI, me taking the government allowed Per Diem got me almost all my fed taxes back, well over 3 grand.

 

Scurvydog, only keep receipts for anything you need to purchase for the job. Earlier on, someone listed a lot of examples.

Do keep your log books. At the end of each month, count up all the days (nights) that you did NOT spend at your home domicile and jot that # on the cover. At the end of the year, add up all those numbers and multiply by the standard per diem rate. From Jan. 1 2009 to Sept. 30 2009, it is $52. per day. For the rest of 2009, it's $59.00 per day.

Jim F

 

Got it straightened out....

The amount in box 12 coded L was for Mileage ... which I "figured" was different then Meals and Entertainment ....

On the Employee Business worksheet there are 2 columns

"A" which is for Reimbursements for OTHER then Meals and entertainment

"B" which is for Reimbursements for Meals and Entertainment..

Since it was for millage...I placed it in Column "A"....

WRONG !!!!!!!

Put the amount in column "B" ...and it did did NOT add that figure to his Gross taxable income...

I could still use the nights away from home x 52 and 59 bucks and enter that amount on the worksheet ....then just subtract the amount in Box 12 of the W2...

Dumb Me... just figured Millage was NOT Meals and entertainment since some occupations do use use millage...

Bob G.

 

Sorry , to confuse you more but you cannot claim the full meal allowance . I don't have the latest percentage to use but it should be on the tax form .

 

If you are a DOT covered Trucker....you get to claim 80 Percent of the Meal Allowance.......

Full meal allowance as determined by how many days away form home you had.... less 20 percent... from that figure you then have to deduct the amount your employer reimbursed you for mileage during the year

Still a major deduction ....

Bob G.