Per diem question

I wouldn't take any math/tax advice from this guy ... 365x59x.8 = 17228 ... and yet he took a $18000 deduction for per diem ... not to mention that the deduction is limited by 2% of your gross and the actual nights you were away from home.

 

OP. Your check will have both the Taxable and (per diem) non taxable amounts on your paycheck.

 

Can someone who knows ( no guessing please) tell me what expenses are deductible... and which are not.... with per diem pay?

 

Per diem pay is based on what they are paying it out for. Either for food or for lodging. You have to be clear on the request.

 

Ok...I'm a brand new-by...first week training. I'm trying to figure out which receipts to save for tax-time. Obviously if I'm reimbursed from the company ( company driver here ) I don't save those for Uncle Sam. No food, hotels, showers. Anything else a no-no?

 

Private school, but instructor said expenses Not deductible until you're actually hired by a company.
What the truck companies call per diem really isnt.

Real per diem is an additional amount independent of your regular pay... for out of the ordinary expenses, such as food or car rental if you have to travel for the companies benefit.
As an otr driver... somehow some pennypinching pencil pusher came up with the bright idea of subtracting thr amt the gbmt thinks is reasonable amt for food when traveling, subtract it from a drivers regular pay, call it "per diem" so it's not taxable as normal income.. and then charging the driver for the paperwork, so the driver can takr s tax deduction he could pbly take anyway.

Sorry for the run on sentence, i can only see 3 lines on my phone when i type.
Mary

 

Hi queetzalcoati. Roadmedic has a good base description for you. Per Diem rates are federally based on the geographic area you are traveling in for business/work purposes. It is also limited to the number of days traveled. The allocation is for your costs of certain out-of-pocket expenses paid for things such as food, lodging, showers etc. If you travel to many different geographic areas with varying federal rates, it is allowable to take a general rate and calculate for all days at that same rate. This is the $59.00 per day rate that was mentioned in another posting. I hope this is helpful for you. I am a tax professional and wife of an O/O.

 

The 59.00 per day per diem is only for food.

I take the per diem and also record showers. During the recent audit, the auditor had no problems with showers listed separate. The food per diem is recorded as limited under DOT percentage. Showers are 100% expense.

 

Yep, they limit so many things sadly. Travel meals are deductible limited to the DOT rate of 80% or a taxpayer can claim the federal P/D rate. You are correct on showers. They are fully deductible, but sadly so many drivers don't even claim them as a deduction. Audits can be very ugly and examiners and auditors are not going to be lenient. I represent many clients in tax examination, audit and appeals actions. The most significant problem is drivers not keeping the adequate records to substantiate deductions they have claimed. Those deductions then get disallowed and result in a higher tax due.