Per deim

Per diem is what truckers get in the form of a tax break because they work away from home. Instead of making you keep all your food and drink receipts they just give you, I think around $58 a day that you are away from home.


I'll use Butler for an example. They pay their drivers $0.23 a mile, which is a very low, bottom feeding wage for a truck driver. Then they will pay a per diem of $0.09 a mile. So you are basically paying yourself $0.09 a mile. It will affect everything from your social security to getting loans. The companies do it because they save alot of money on taxes and driver pay.

I could see where it might be an advantage to take a small per diem but only on top of a decent wage.

 

Where I am 30cpm 10cpm Per Diem, And Per Diem has never affected My Ability to get a loan. As for the SS Never had my Tax Atty Mention anything about it affecting it, when I was 1099 I wrote a lot off of my taxes via my Atty, Now that I am W2 He has stated that there will only be a few minor changes, and I will continue to have great write offs.
The one thing I will recommend ( not that some advice on here will not be good) talk to a Tax Attorney, or CPA, in regards to your Tax Breaks, As we all know some truckers are like Jail House Lawyers, not so accurate and seriously mis-informed.
This is My Opinion and humble or blunt that is how I see it.

 

I don't really understand it as well. When I had my truck I always paid more then enough during my quarterly's and so I always got money back at the end of the year. Likewise I always claim zero so I always get two to three thousand back. The mill I work for now have talked about a per diem program and while I don't think it's in effect right now, it sounds like it will be soon. If they do, how will it affect my tax returns. I've always liked getting back money and the thought of having to save money to pay taxes shortly after the holiday season really has me concerned. Speaking of which, I have 3 birthdays, Christmas, p/u truck insurance, and personal property tax in December, compounded with slow work. The last thing I need to worry about after the new year is having to come up with money to pay taxes.

Oh, BTW LTL is "less then truckload". The term has been used for years or at least since the 80's since my best friends parents owned a Air Cargo company, but not a common term if you haul other goods or are OTR.

 

For IRS purposes -- Per Diem -- Daily allowance allowed for tax deductions without receipts.

For payroll purposes -- Per Diem -- The amount you receive from your employer tax free. Generally around .10 a mile. You do not get to claim Per Diem on your returns, unless there is an error in the computation at the employer.

An employer generally likes to promote the Per Diem offered by the company. Many even FORCE you to take it, as a matter of employment. It reduces their tax burden as well.

 

It won't affect your credit it will just affect the amount you can borrow, or the amount you will get from social security.

I used Butler because its the worst possible scenario.

 

The basic milage pay is your gross pay before the per diem is added. The lower your gross pay is, the less you pay into workmans comp, social security, and unemployment insurance. By the way, the employer pays less into the system also. It is a safer bet if you can get a higher flat rate of pay of about 40 cents lets say. Remember, that milage based per diem only goes to you if the truck is moving. If you claim the daily deduction at the end of the year on your taxes instead, you get it whether your truck was rolling or sitting away from home. I have to pay my tax preparer either way. The question is, are you 100% sure you won't get fired or injured on the job. I used to be. I am getting half the unemployment benifits I would have gotten if I hadn't been getting a milage per diem. Banks base loan amounts on your gross income and credit history. Companies don't do per diem pay for your benifit. Just remember that.

 

You're confusing two different things.
I'll separate them out for you so you can tell the difference in the future.

1. First of all, you say that 'per diem" is a tax break truckers get because they work away from home. THIS MUCH is somewhat true. The Government does consider a small amount of truck drivers wages (and other occupations) to be tax free.
2. The second thing you say.........and this is where you go wrong......is "per diem" is a wage a company pays you above your "base pay" This is false. THEY (company) might say it is pay above your "base pay", however, it is pay they SUBTRACT from your base pay before taxes, then "give" back to you AFTER taxes are taken out of the "base pay". It isn't money "you are paying yourself" and it isn't "extra" pay, it is money that you have already earned and the ONLY advantage of doing this goes to the COMPANY and not the driver.

How does this "per diem" give advantage to ONLY the Company?

1. For one, YOU pay less in Social Security taxes, (which means much less Social Security when you get old) but SO does your employer, as well as paying LESS in payroll taxes.
2. Your employer also pays less in unemployment taxes, because YOUR wage is artificially REDUCED by accepting "his Generous offer"; and THAT's how employers push "per diem".....they want YOU to think THEY are being generous (They're not). So, you will get LESS in unemployment, if you are laid-off.
3. YOUR ability to finance a car or house is REDUCED because of the artificially reduced wages reported by the employer.

 

Affecting the amount you can borrow DOES affect your credit rating.

 

ok i am a bit confused as i am new to US. taxes and such-----
A--if you dont take the per diem from your company--can you claim that at end of year and get it back on taxes?
B---if you are offered a job at say 39 a mile--and 10 is diem---are really not only making 29 a mile and kind of a advance of 10 permile which you cant then claim?
its confusing for me--in ca. you are allowed to claim so much per 24 hr period you are away from home---or actual reciepts---i cant remember exact numbers but it would generally give me inbetween 3/4 thousand--when combined with showers and incidentals