per diem - good thing or bad thing?

Cool cool thanks for all the info guys.

 

I believe you're stuck with it. However.... you can claim anything above what you're paid by Prime as per diem and the 80% of the $59 per day as a deduction.

Prime's deal in all of this is that they don't have to pay withholding and social security tax on the per diem payments - they do loose some on the deduction they receive for payroll dollars. Its all strictly legal, and has been a part of the tax code for decades.

You're deal is lowered tax payments - albeit at the cost of lower potential worker's comp payments, lower social security payments, and having to work a little harder at the loan window to convince the bank that your AGI is not ALL that you made in income.

 

I see. That would work out the same. Of course, next step would be to figure if itemizing and deducting the extra per diem beats the standard deduction.

 

You generally need more deductions to make it worth it - but the only way to find out is to prepare a return both ways. For many folks, even the per diem deduction itself is not enough to beat the standard deduction. In that case, taking per diem payments is an advantage.

 

i take the perdiem in stride. hey free money. i tried the itemize thing, and at a certain point it actualy became pointless. (for me anyway, this is my experience, others may have different results). i dont spend an average of 56+ dollars a day. so all i had was a headache and a pile of fire starters. and i see its been brought up a couple times, but i myself had zero issues with my bank buying a new house. (again that was me, others may differ)