Hey guys and gals, I've got a finances question here.
I've been looking at my settlements recently and figuring out how much more or less I would be making if I wasn't getting per diem taken out. So I pulled up one settlement and took the total miles for one particular trip and calculated the regular non per diem amount. Then I subtracted my current base rate (on per diem) and then subtracted the per diem rate. In one trip I would have made $62 more. On another trip I would have made $20 more. (now mind you I was looking at individual trips on one particular pay check so on this one in particular I would have made at least $82 more, plus the other 2 trips that were on that particular check that)
But my question to you is, if I stop per diem, how much more in taxes will be taken out? Will I still be coming out ahead or will the taxes off-set the extra I would have made?
Going from Per Diem to regular pay
Discussion in 'Experienced Truckers' Advice' started by Sequoia, Jun 16, 2013.
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Weekly?
You can check it out on the IRS, I can link after I know and then you have to figure the social security and medicare.
If weekly, then page 44 of this link.
http://www.irs.gov/pub/irs-pdf/p15.pdf
Social Security is 6.2%
Medicare is 1.45% -
ssi retirement will be lower workmans comp will be lower your yearly tax base will change your company will make a few extra bucks off you
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What percentage or amount per mile are they claiming is per diem, now?
Per Diem, the way most sleazebag companies pay it, is a suckers bet. Per Diem in the real world is paid in addition to a normal pay rate, not as part of it.
Your paychecks will be a little smaller, but I bet you come out ahead overall by dumping the per diem, (As long as it's the fake per diem these companies offer)bigdogpile Thanks this. -
If you adjust the number of exemptions claimed by re-filing a W-4 form and if you contribute to a regular 401k (if offered) or a reg. IRA, you shouldn't notice much of a difference. Changing the number of exemptions will change how much tax is taken out & contributing to a retirement plan will lower your taxable income...now. There are a LOT more to consider than this, and you should talk to a tax pro that understands trucking; but short answer is both things I mentioned will do roughly the same thing as per diem pay.
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Is the OP thinking long-term or short term? If a trucker can see the bigger picture come tax filing time and can learn to properly do the standard meal deduction and itemize, i doubt there is any trucker that will NOT come out ahead financially by going away from per-diem. But if the driver is thinking in terms of living week to week and can not see so far down the road as to imagine a larger refund check next year, then I guess per-diem makes sense to them.
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I did not have a mortgage so I had little in the amount to help. Per diem is then subjected to the 2% floor and you lose a hunk of the deduction. So, you have to consider all areas. -
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Seems like some are missing the entire point. I understand fully that a refund is not ideal but the point I'm trying to make is the standard meal allowance deduction allowance for truckers more than off-sets per-diem packages offered by most carriers.
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