MANDATORY COMPANY PAID PER DIEM: One of many Scams to screw company drivers!

Does the $59 reduce gross income? In other words, this is a deduction not a credit right?

We get $15 per day, perdiem anytime we are away. What i'm trying to figure out is will the $59 save me more on taxes than getting the $15 per day?

So, perdiem for me would be $75 per week, and if i'm out 52 weeks (let's say 5 days per week) that would be $780.

However, if i can get the deduction, that would be $15,340 reduction in gross income (i think?). i should gross 85-90K.

Will the $15,340 reduction in gross income save me more than $780 in taxes?

 

think the best bet all the way round is to consult a professional. A professional tax accountant.

 

I am not a tax professional and I'm only responsible for my taxes. Now with that disclaimer out of the way her is what you need to know. The IRS gives you a flat rate of $59 a day for every full day you are out on the road. If you are out a partial day you get 3/4 of a day. On your taxes take the number of days out times $59. Then take what your company paid in per diem and subtract it from the total allowance and this is reported as an unreimbursed employee expense. By the way showers, laundry, parking, motels do not count in the per diem. The ripoff is the "administrative fee." Companies only save 80% on their taxes so to break even they cut pay by that 80%. I'm sure I've made this clear as mud. Bottom line on what you receive per mile as a before tax amount is to add your per diem rate and your taxable pay. That is what you are paid. Your tax rate is on the mileage pay. In short your take home should bump up, but there are long term consequences.

As for the loans, social security and other issues connected to pay definitely check with an accountant that specializes in truck accounting. Any accountant that doesn't know about the special $59 a day per diem for over the road drivers doesn't know enough about our industry for you to waste your time with.

 

You need to make sure what your company means by "per diem pay". If they are messing with the numbers to reduce your taxable income, and then charging you a fee to do it, say no thank you. There are a few companies, usually daycab companies, who actually give you extra pay, above usual pay, if they ask you to stay out overnight, and they call it per diem as well. That is not the same thing, and wouldn't be a bad thing.

 

Exactly. The company is calling this 'per diem' when it actually is not.

This actually IS per diem.

 

Also make sure the amount on your w-2 does include the per diem, that is if your company is on a non-accountable plan which it should be.


A nonaccountable plan is a reimbursement or expense allowance arrangement that does not meet one or more of the three rules listed earlier under Accountable Plans.
In addition, even if your employer has an accountable plan, the following payments will be treated as being paid under a nonaccountable plan:

• Excess reimbursements you fail to return to your employer, and
• Reimbursement of nondeductible expenses related to your employer's business. See Reimbursement of nondeductible expenses , earlier, under Accountable Plans.

An arrangement that repays you for business expenses by reducing the amount reported as your wages, salary, or other pay will be treated as a nonaccountable plan. This is because you are entitled to receive the full amount of your pay whether or not you have any business expenses.
If you are not sure if the reimbursement or expense allowance arrangement is an accountable or nonaccountable plan, ask your employer.
Reporting your expenses under a nonaccountable plan. Your employer will combine the amount of any reimbursement or other expense allowance paid to you under a nonaccountable plan with your wages, salary, or other pay. Your employer will report the total in box 1 of your Form W-2. You must complete Form 2106 or 2106-EZ and itemize your deductions to deduct your expenses for travel, transportation, meals, or entertainment. Your meal and entertainment expenses will be subject to the 50% limit discussed in chapter 2. Also, your total expenses will be subject to the 2%-of-adjusted- gross-income limit that applies to most miscellaneous itemized deductions.

http://www.irs.gov/publications/p463/ch06.html