per diem

its not as simple as that, but its certainly not the automatic good deeal they make it out to be sometimes. it is a benefit for some to take it, for others it is most definitely not.

it all depends on your family and financial situation. a single person with no mortgage will NORMALLY benefit from per diem pay. a married person with 2 dependent children and no mortgage will only benefit if the household income exceeds 56k per year. single or married, if there is a mortgage involved will almost NEVER benefit from taking per diem pay.

it does, however,approach the criminal that companies charge for giving per diem pay, as they already benefit from lower payroll taxes.

 

If you are single, with no mortgage, the only way it helps you NOW is in a little larger weekly paychecks, and simpler tax return filing.

You are hurt in the long run, by reduced payments for workers comp and unemployment, if that ever is needed, and reduced gross income for purposes of qualifying for a mortgage and other loans.
We can also factor in your reduced income for social security purposes.

 

well, i redid the calculations, and it seems i could not be more wrong. as a dot hos type employee, if you are driving all year (taking an average of 315 days away from home as an otr driver) your meal allowance would be 18585. times 0.8 on the 2106 would mean that you would be putting an amount of 14868 on schedule a, and making 50,000 per year would mean youd have to subtract 1000 from that, giving you a deduction of 13868 JUST FOR THE MEAL ALLOWANCE ALONE. so i take it all back...it seems to me now that nearly all otr drivers spending 300+ days away from home would benefit far more from itemizing, regardless of your situation.

furthermore, since itemizing yields a greater amount than the standard deduction, it would seem that, for otr drivers, per diem pay should nearly always be declined. so sorry ive been giving incorrect information. ive now done the math for several examples, and i come up with itemizing being a better deal nearly every time. and i was not even taking into account anything but the meal allowance. im GUESSING that my incorrect results came from using 50% as the amount on 2106 rather than 80%.