can some one please explain per diem pay??

New but related question:
What do you think about a company that decides to change horses mid stream? We've just learned that our company is going to start designating part of our mileage pay as per diem, we don't know yet how much, and no, it's not optional. Essentially, this is a cut in pay for us.

Y'know, I'd rather take a direct cut in mileage pay to help our company stay afloat in today's economic mess. It seems like that would be a more honest approach.

 

If I understand this right, the company I am going to work for requires that I participate in their per diem plan. What ever they do not compensate me for I can claim the balance on my tax return? By the way thanks for all the info. Great thread

Surfphil

 

I am a tax professional (just reviewing this forum to get answers to questions about how truckers keep track of per diem). I would like to clarify two points (H&R Block is not the only place to get free advice)...I will respond to any questions you may have...just ask.
Secondly, you don't have to itemize deductions to take deductions...Schedule A only allows you to take employee business expenses to the extent they exceed 2% of your adjusted gross income. Why not prepare a Schedule C - and claim 100% of your deductions? You have a valid business - that's what it's for...
And, please let me know if I can help. I do basic returns for $100, including 1 Federal and 1 State return - and electronic filing included. If you need a schedule C, it's only $50 extra.

 

cmchiker,

With all due respect...this is not intended as a personal attack toward you.

I am not sure what kind of "tax professional" you are (meaning I am not sure what your credentials are) but, if I am reading your response correctly, I would highly recommend that you attend, immediately, some quality continuing professional education as it relates to self-employed taxpayers versus company employees.

It appears to me that you are recommending that company drivers (i.e., employees of their respective companies) file a Schedule C with their returns, on which they would claim their "business" expenses, those expenses incurred related to their employment, that they are not reimbursed by their company. In so doing those expenses, in the form of a loss, would flow through onto page 1 of their 1040, thereby allowing the deduction of 100% of those expenses.

If that is what you are recommending...you are 100% incorrect and are giving bad advice to those folks here on this board.

A little lesson for you...if a taxpayer is a company driver, he is an employee. He is not self-employed nor is he in business for himself as a truck driver.

Unreimbursed employee business expenses, along with any per diem allowance (the amount to which he is entitled in excess of the amount paid to him by the company), is filed on Form 2106, Unreimbursed Employee Business Expenses, the results of which flow to Schedule A and are combined with other itemized deductions (medical expenses in excess of 7.5% of AGI, State and Local taxes paid, home mortgage interest, and charitable contributions are the most common).

And the previous poster is correct, in that, the taxpayer would need to have total Schedule A deductions in excess of the standard deduction to which he is entitled in accordance with his filing status, in order to benefit from these expenses.

I am not sure what your tax credentials are but reading such posts and advice like this is exactly why I am a HUGE proponent of the IRS proposal to require licensing of ALL so-called "Tax Professionals".

And yes, I AM a tax professional (since 1994) and am a actively licensed CPA in the state of FL.

If you have further questions...I'd be glad to answer them.

And no, I would not rely on H&R Block employees...most have merely completed a 10 week tax class and most returns, those with any complexity, that leave those offices are incorrect. I know from experience of reviewing them.

 

Thanks neighbor,,,,,,,,,,,,,,,,,,

 

I did mention that I was new to this forum (and researching info for an existing client)...it was not clear to me that the previous poster was talking about "employees" and I was just trying to point out what I perceived as "mis-information" for self-employed truckers. Of course, I agree with the information you gave and appreciate you "clarifying" this issue for employee truck drivers.

I am a CPA in the state of CO - but new to this forum. I'll refrain from posting until I've had a chance to post my profile and formally "introduce myself".

I apologize for any confusion I may have created.

 

Hey all. Will be filing my taxes soon and had a question about per diem. Started trucking in July of 09 and was on the road 134 days from then until 12/31/09. Trying to find out how much the per diem rate is for where I live. I'm in Greensburg, Indiana about an hour south of Indy. All of the information I've found doesn't list a rate for that area and says that if my city and county are not listed it falls under CONUS? Does this apply to truckers or is our per diem done differently? If anyone happens to know how much my per diem rate would be or where to find the information, I would appreciate it. Thanks.

PS-I will be having a professional do my taxes for me this year so I'm sure it will get worked out no prob, but I would like to know for myself what the per diem rate will be. Thanks.

 

Check IRS pub 463 page 6.

It gives the rate for transportation workers.

 

He talking about the per diem for filing for those over priced areas like NYC and others. It's actually for those "traveling salesmen" types who have to work in over priced towns or counties.

You as a driver ONLY file for an "area" if you are going to attempt to itemize for each zip code. Just count your days and add them up and let your accountant do the rest.

It's a PITA to do the zip code thing and you have to show an over night in that code to get it AND have the receipts from it also.