Per Diem and taxes

If you are referring to what I stated in the other thread, let me clarify. I was referring totally to what was stated concerning the company withholding part of his pay and then returning it in the form of perdiem. I did not catch that you were referring to the standard rate being deducted. He can't do both. If the standard rate is used and he itemizes, you would be correct but done as the original poster stated he is losing 15% of whatever money they are basing it on up front and receiving the rest (85%) as non taxable perdiem. When I questioned your use of .8 that's what I was referencing. My error, I should asked for clarification before jumping in.

BTW, you are correct that it does not affect FICA or for that matter any other item I mentioned if one takes the standatd rate, but it does if a company does what the original poster mentioned.

Best regards

 

Yes, it will lower your SSI, unemployment, gross income (when seeking a loan), and other things.
In trucking it is best to take the standard deduction, unless you are really spending allot on the road.
Since we are subject to federal HOS regulations our perdiem rate is much higher per day than for other fields.
I believe that most businesses get like 39 bucks a day, while we get 59 per day as the standard deduction.

And it is very easy to prove, since it is based on days away from our tax home for our required 10 hour break.
Thus all you need is your logs to show it. Not receipts needed. You count the full days you are away and those are at the full rate.
Then the 3/4 days and use 75% of the rate for those. Be consistent, as was said on another thread.
It adds up to a large deduction.
If you are running teams with your wife it is even better, since both of you get to claim that rate. Then you are looking at a base of 59 bucks per day each. It does not take long then to get to where you can use a schedule A, even if you do not own a house.

 

It may look like a deduction depending on how they show it on the check. Employers will subtract out the per diem portion and then calculate taxes, then re-add the amount back on at the end. On some pay statements it makes it look like they are taking money out but they are simply removing it for tax calculation and then re-adding it back in later.

 

Why do you have 2 threads on the exact same topic? or atleast that could easily be put into the same topic?