Company driver per diem

Per diem is not a dollar for dollar deduction whether written off as a business expense or as a personal work related deduction.

 

Why would you want per diem? Lowers your earnings on paper, making you less eligible for that mortgage on the house you're looking to buy or the loan for the car you've been drooling over. It also means lower disability checks should you be injured, less vacation pay if your pay is based upon your average wages over the previous year, and also it means lower social security checks coming to you if you're near retirement age.

Why?

Because that per diem is a "reimbursed expense" the company is paying, and as such it is considered tax free because you're being reimbursed an expense you had.

Keep in mind, at tax time you get a per-day deduction for each day you spend on the road. This "per diem" is basically substituting for that deduction...but you STILL need to compare what the company paid to the deduction you'd otherwise be entitled to claim. If they over-paid on per diem, you'll have to pay taxes on the difference. If they under-paid, you can claim the difference. Either way, you'll pay the same taxes whether it's paid per diem or you are paid wages and claim the entire deduction for yourself. The big difference is your gross pay on that W2, which will be significantly lower if you've been paid part of your check as per diem...which is why those things I mentioned in the 1st paragraph are affected.

The ONLY benefit to you as a company driver if you're paid per diem is if you owe child support or alimony. That is usually based off your wages, which would not include the per diem...so you'll have less being taken from your check if a good chunk of that is paid as per diem. If that doesn't apply to you, then it's pretty foolish to request per diem from your employer because there is no benefit to you. If you want bigger checks now instead of a big refund, then adjust your W9 to claim an extra dependent or two so that less money is withheld for your taxes. It makes sense to do that anyway, because the government does not pay interest on the overpayments you've made throughout the year, so you've basically given the government an interest-free loan.

Personally, I wouldn't work anywhere that forced per diem...and if given the option, I'd always refuse unless I had a reason to hide part of my pay from someone.

 

Most OTR companies don’t pay per diem. It’s up to you to take it off on your taxes, talk to your tax preparer.

 

Really? Where in the new tax code does it outline that?

 

In the new tax bill they removed unreimbursed employee expenses. Because they removed this, they effectively removed the deduction for per diem.

 

I thought they basically took per diem away also because company drivers can't itemize it. Other people keep saying you can. They did not take away per diem, they just took away they option for unreimbursed employee expenses from what I hear.