Forced Per Diem... Theft?

finding an accountant or CPA that knows trucking and tax rules with be well worth whatever you spend!

 

Good point.

I have professionally prepared returns since 1982 and been aware of the trucking industry and the rules for them since the mid 90's.

Just because they have CPA behind their name does not mean they are aware of the special rules.

 

YOU ARE WRONG.....................on a W2 Box 1(one) is your Gross Income, Box 12 Letter (L) is your per diem. Letter L is Substantiated employee business expense reimbursements (nontaxable).

Sorry, but you are not a CPA. I in my situation, per diem was a great option. It all depends on you own situation. Is it for everyone, no.

If Marten is not reporting it this way on your W2, you need to hire a CPA and attorney to have it corrected. Or better yet, just call the IRS, they love to find tax cheats. For Marten to get a tax break they need to show your per diem on Box 12(L). Marten is paying your SS tax based on the Gross Income in Box 1. If they report you per diem as gross income they gain nothing.

Mark

 

Personally I don't have a problem with any company that offers per diem to their drivers. But the key word if OFFER. I don't like a company that gives you no choice but to go on it. I understand it's less taxable income and yes it saves the company money as well but it should be a choice not "here you take it or else."

 

per diem is rip off..not only does my company charge a $25 wk hidden fee but i just found out it also lowers your disability benefits, vacation pay, and of course ss benefits and forget about getting loans etc based on gross income.

 

What's the purpose of the 25 dollar fee if I may ask RumRunner? And also I have found that if you explain to a bank that you combine your gross with the per diem then they understand you're actually making more money than what your gross income shows. I'm on per diem now but as I said it should be a choice, not forced on you, which is what I hear Marten is doing now... they are not giving you the option to take per diem or not, everyone HAS to go on per diem pay

 

He's not a law maker in any state. that said...per diem works as he stated AND as you stated.

The Fed sets guidelines for child support. The state can increase them by whatever means they wish.

Typical child support in MS can be as little as 15% to as high as 75%, depending on the Judge.

A good Judge will ask to see your returns, and rule from there.

IMO, any Judge who uses the per diem as a method of increasing your gross. Is just as criminal as the company who offers it.

While WI lawmakers may view this as evasion. The expense is justified. If said driver were living at home, he would not have these expenses.

 

Just read all the posts in this thread. One of our company's FAQ sheets on per diem begins with the following Q & A that I'm having some trouble comprehending:

"Q: Why does the company reduce my pay on the per diem plan?
A: IRS code disallows 20% of any deductions for expenses on meals and entertainment. Per diem is included in this category. Therefore, in order for the company to pay a per diem of $.14 a mile, it will not be able to deduct $.025 per mile. This reduction per mile helps offset this cost."

I fully understand the first sentence because starting in 2008 the percentage of the $52/day that drivers get to deduct became 80%. The second sentence sounds natural, but on the other hand suddenly there's some "category" being referred to that sounds a little ambiguous to me.

The third sentence sends my brain into a tailspin. Who's doing the deducting here, the driver or the company?

In the fourth and final sentence it looks to me like "not being able to deduct $.02 per mile" suddenly becomes a "cost" that, when what appears to be 100% of it is taken out of driver pay, still hasn't been offset, just "helped" to be offset.

I see that there is an issue with only 80% of the $.14 reimbursement being nontaxable, while at the same time none of that reimbursement goes into gross (taxable) wages. Theoretically something needs to be done to account for the disparity so the IRS receives the income tax on the $.025 per mile that tax is due on. And it somehow wouldn't make sense for the company to just reduce the per diem to $.115 instead of $.14 in the first place and shift the remaining $.025 into gross wages, I guess because the per diem is supposed to be per diem, not some after-tax rendition of per diem.

To summarize, the only shortfall I can see here is the income tax on $.025 per mile that has to come from somewhere. But how much does that amount to? Are we not talking about something like 15% of $.025 per mile? That equals $.00375 per mile, or about 1/3 of a cent per mile, not 2.5 cents per mile.

Can someone please explain? Is the company just spouting gibberish to fool drivers in that answer they give, or is there some real substance behind it?

 

I have no idea what that means either... is the .025 cents a processing fee of some kind for the "paperwork" they have to do? Like you said why not just drop the per diem to .115 and tack the other .025 onto the gross pay? Seems pretty simple... WAIT!! That's why they don't do it! It would make sense!