Travel expense question

https://www.teamrunsmart.com/mobile/2480f42e-0626-4f78-a13a-85d03dbf3235/articles

 

Atbs says .75 of .8

 

I think you are missing out on the issue.

Your real income, for all legal purposes, has been set and reduced by the employer if they play the 'per diem' game.



It's not about whether to claim the per diem at tax time, or not.
It's about the company reducing their liability if something goes wrong.
These are companies playing you for a chump, and it's not because it's fun. THEY save money doing it.

Using rough figures, assuming you you are paid $40,000 a year, but the company calls $10,000 of that 'per diem', you're only making $30,000 a year.

Get hurt on the job? Your WC is not based on 40,000 a year, but 30k, at whatever percentage they pay.
SSI? Your contributions are less, as well as the employers on your behalf. That has to reduce your eventual payments, maybe only a little.
Same with unemployment insurance.

I worked for a company that paid this way 25 years ago.
Every time they'll smile and tell you how good it is, and how many drivers like it. Blah Blah Blah.

This is a separate, very different issue than 'I made $50000 last year driving OTR, and was away from home 307 days'.

 

I did not miss out on the issue. I know all that. But for companies to "force" per diem is their way of saving money. The IRS allows this so long as they go by the rules.

What I found ironic is the companies "charged" me pennies for the ability for them to save themselves monies. To me the code can be written and done with to adjust this and again the companies ride the back of the drivers to get back monies they are owed.

 

It sounds like you are not taxed on the $50. If that is the case you can't duct it again, it is already tax free.

 

CRB is right, arrival and departure days from home $63 X .80 = $50.47, .75 X 50.47 = $37.80

 

M&IE rate is what it is really called, not Per Diem

you do not take 75% of the 80%...

https://www.irs.gov/pub/irs-pdf/p463.pdf

($65 for travel outside the continental United States)

full days are $59 (jan-sept)/ $63 (sept - Dec) x .80 (this will have to be verified if 80% or full amount, I don't see it in the publication)

partial days are $59 (jan-sept)/ $63 (sept - Dec) x .75

partial day is .75 due to being a partial day...

Special rate for transportation workers.

Travel for days you depart and return.

page 6 - Method 1: You can claim 3/4 of the standard meal allowance.

It used to be for full days was 80%, but I am not seeing that on page 6 anymore.. It shows full amount for full days and .75 for partial days.

This will have to be verified with the IRS if the 80% changed for full days.

 

Partial days are .75 X $63 =$47.25. Full days are $63. But both figures, $47.25 and $63 are subject to the 80% limit.

 

Show me where you take 75% of the 80%?

Have you read the pub in the link above?

page 6 - Method 1: You can claim 3/4 of the standard meal allowance.

I was audited for 2008 and claimed 80% of full days and 75% of partial days. I don't understand where anyone comes up with 75% of 80%..

The standard meal allowance is Jan-Sep $59 and Sep-Dec $63 with Canada/Mexico being $65 year round..

Method 1 is pretty clear, you take 3/4 (75%) of the STANDARD MEAL ALLOWANCE.

 

If you look at a IRS Form 2106, Line 5 is where you record all your meal expenses, full days at $63 and partial days at $47.25. On line 9 is were you multiple that total by .80. The entire amount on Line 5 gets multiplied by .80 full days and partial days. So on partial days it would be .75 X $63 on line 5 and then .80 X $47.25 on line 9.