can some one please explain per diem pay??

ONLY guessing, but $59 might be the rate for '08. But more to the point, this is kind of a recurring theme. Don't get me wrong, I greatly appreciate the info/advice I get TTR from the many who take the time to reply. But there are times I think some, (me included) fall prey to becoming part of the echo-chamber. That's why I sometimes ask for directions to the originating authority on some subjects. I can see how some take it the wrong way, but have found that sometimes well-intentioned people are simply misinformed. I'll be waiting to see replies as well.

For what it's worth, The reason I challenge the whole 75% of ?rate is that an instructor at my school said that it's NOT 75%, it's 100%! Before giving him an arguement I did some diging, and sure enough I could only find people quoting other people on it, but NOTHING in an IRS Pub. Interesting No?

 

From www.irs.gov:

"Meal expenses when subject to "hours of service" limits. For tax years beginning in 2006, 75% of the reimbursed meals your employees consume while away from their tax home on business during, or incident to, any period subject to the Department of Transportation's hours of service limits are deductible.

See Publication 463 for a detailed discussion of individuals subject to the Department of Transportation's hours of service limits."


From what I can figure out it seems like a "pay me now or pay me later scenario". I don't see how it changes your taxes owed, but rather how much you owe or get back at the end of the year. The amount claimed won't change. 75% of $52 is still going to be $39 whether it's calculated weekly in per diem payed or at the end of the year in one lump calculated deduction. The difference is whether you pay the tax (deducted weekly) each paycheck or the pay the tax at the end of the year. The only downfall to per diem, aside from SSA, is that if a company pays more in per diem than what someone is allowed to claim, the filer will be responsible to claim the overage as untaxed income and may have a large sum to pay at the end of the year. It shouldn't be too difficult to figure out how much per diem I was paid this month versus how much I can claim. The difference, if any, I would stash in a savings account so I had the cash available to pay at the end of the year (if I was overpaid the per diem allowed). At least this way I would make a little from the interest, rather than giving the IRS an interest free loan. Either way, it's definitely a little confusing at first glance.

 

I can't show it to you in writing,this is what I learned from the top trucking tax advisor that xm radio,landline uses,it was about two hours long,if you don't believe what I tell you ,that's fine,I'm not losing sleep over it. Ats uses one of the top tax pros also, i believe they do more truckers taxes than any other service in this country,I went thru a 1 day seminar at ats just on truck taxes,I can't and won't tell you everything I learned because you may not believe me. That tax man accountant on landline has done truckers taxes for forty years and keeps right up to date.For the guy that said it doesn't matter before or the end of tax year,here I go again,when your company gives you any perdiem,take it,you are only paying taxes on your pay minus the perdiem,when you claim it at the end of the year,you have paid on your whole amount with the perdiem being taxed for earned income,in other words,you are paying taxes,state and federal,also ssi and medicare,when your company gives you perdiem and you accept it,you are not paying taxes on your perdiem,it comes out from the top before taxes,like a company health insurance benifit that you pay part of. when the company has perdiem you get 100% OF IT,IF IT IS LESS THAN THE 54 A DAY USA OR 58 CANADA,YOU GET 100% OF IT,ADD THE DIFFERENCE AND CLAIM THAT,WHEN YOU CLAIM IT YOURSELF YOU ONLY GET 75% OR 54 WHICH IS 39.,IF YOU DON'T KNOW OR BELIEVE THIS THEN YOU NEED ANOTHER TAXMAN OR ACCOUNTANT TO DO YOUR TAXES,I am all done with per diem now. We need a tax man on this forum that knows as much as i have read and learned by reading every mag I get my hands on and listening to landline and folks like that,you all have a great day.

 

Nevada Jim. I agree with your assessment on per-diem over-all. I gotta say I went to irs.gov, but the only place i saw anything about meal allowance for transportation workers was on page 6 of pub 463. I know I saw the 75% reference somewhere, but now able to find it. Do me the final favor of telling me exactly where you found it on irs.gov and I'll never again (crosses fingers) post on this subject again!

One final thing i'd like to put forth, if I haven't already, is this. Newbies getting into trux for first time in coming months. Better to take the company paid per-diem (if you are so inclined) rather than trying to claim deductions at year's end. For the obvious reason that if this is one of the only deductions you have to claim, it will likely be less than the standard deduction, being as it'll only be for partial year. Wait until you expect to have a whole year of driving/meal deductions before considering declining company paid per-diem. At least that's the way I see it.

I'll bug ya no more!

 

Ok what if the company does a per diem pay but DOES NOT reduce your mileage pay? They give you $52 a day per diem for every day you are away from home but the mileage rate remains the same. How can this be bad?

Now I'm just learning this stuff and I understand that it will reduce the amount of income that we show we make per year. For us at this point in our lives is not a bad thing (I am in college and we have a daughter with disabilities so showing lower income helps not hurts us right now)

Am I fooling myself thinking this is a good thing?

 

The per diem is 54 a day usa and 58 if you run canada,nothing to do with milesage at all. Some companies give you per diem in miles,thus if you got 6 cts a mile and ran 6oo miles you would get,36.00,then your allowed to add 18.00 more to make the full 54,if vice versa you would have to claim it which is over 54, I have never seen or heard of a company going over the 54.,it is not legal to dJust reo that in the feds eyes. They will be charged with tax evasion if they did that. just remember if your company gives you any per diem you get to add to it to make the full amount of 54,if they don't have perdiem,you get 39 of the 54 at the end of the year.Your accountant or tax person will tell you to claim perdiem,if they don't,get another opinion,American tax service is one I have been thru oreintation at ats,that lady is great,she worked at marten for quite a few years and is well aquainted with trucks and oo's and drivers. However I did not want to work for them as a lease operator. You pay them to drive their truck and they do almost nothing to help you. Shop in gary in. ,head mechanic won't give you the time of day,treat you like a fool,this fool left by bus the same way I came after telling them all why. Wasted a whole week there. American tax nice folks,enjoyed that day there. Rest of the whole story in my posts.

 

If my company pays NO PER DEIM what is the best tax advice you can give me?

Thanks
The Varmit

 

You don't have to save receipts. You just take $52.00 a day for the days you were away from home. THat's the beauty of it, $52 a day deduction and NO RECEIPTS!

 

Also - if you ever file for UC - your quarterly earnings will be lower - hence your UC Benefits will be lower. Same would apply to WC.

 

reasons to go to work for a company that gives you perdiem pay, you pay less taxes at the end of the year,you get all of the perdiem,instead of the 75% the irs allows you,if you are retired and getting ssi retirement benifits,that per diem doesn't show or count on your limit of allowed making money,thus raises your income,as its not recorded when you get the perdiem,if you owe irs or child support,it shows less income and gives you more money to survive each week when the IRS liens your pay,at the end of the year you get all of the 75% right off the top,whereas if you don't get per diem from your company and claim it all at the end of the year,you had already paid,ssi,fed and state taxes on it each week and lose alot of it,perdiem. The only disadvantage I have seen is when you get or take company per diem,your total income on paper shows less the perdiem,and the loan institutions go by what income you can show,in other words the per diem doesn't show and you qualify less for a mortgage or loan..I also believe if yor worried about that,take the perdiem offered from company anyway and take and save that money in your bank so that will help you secure the mortgage or loan you want,or put it all in your 401 or any retirement fund,you will be furthur ahead when you do retire,this way,instead of not taking the per diem.I personally believe and have found that companies that offer per diem are doing it for the advantage of us drivers for the above reasons I mentioned,The company may save a little on ssi tax paid,but in the end the little folks like us gain more than they do. This is also the last time I will ever mention or discuss per diem,unless or until the rules are changed.