How Per Diem works now

Even if you can't itemize - given a chiice between 48 cpm being paid as 12 per diem and 25 mileage or 50 cpm without company per diem - which would you chose?

 

I would personally take the higher base pay. I don't think that's the right way for a company to handle per diem and only some do it that way.

 

Not every company assesses a “handling charge” to do per diem. Example where I work, if you’re making 45 cpm, you can take 45 all taxed, or you can take 29 taxed and 16 non-taxed per diem.

Since the loss of form 2106 for employees, it’s now a no-brainer to take the per diem and invest the “tax withholding savings” to offset screwing yourself as far as social security is concerned (which I’m doing and I can see retirement age from where I’m now standing). If one is a few years from social security, they should probably opt out of any per diem plan they may currently be doing.

And be sure to note as a mentioned several days ago in a related thread, many are not having sufficient taxes withheld to cover their tax bill for tax year 2018 because the tax withholding tables were improperly calculated. They may get a much lesser refund or may even end up owing.

 

Owner ops and lease operators can still claim perdiem as deductible business expenses. 1099 contractors might be able to do the same.

Company drivers can no longer itemize perdiem expenses.

 

That is incorrect.

Anyone having to file a schedule c 1040 can claim it. All you need is income from another source. Sell a couple things on Ebay,Boom income, and you can right off a laptop

 

Fine. I'll rephrase that. Company drivers can no longer LEGALLY itemize perdiem expenses.

If you want to falsify your tax return to indicate that you incurred the perdiem expenses as business expenses, you can do that, and hope the government doesn't audit you.

I wouldn't suggest that though. Too risky.

I could also be wrong about the legality of falsifying perdiem expenses, but you will need to show your side of the argument a lot more clearly before I will risk getting into a serious audit tussle with the IRS.

 

#### I am going to bed, long day tomorrow.

 

Yeah. No. I think showing 320 days of daily meal allowance [under DOT rules] and $2,000 in hotels and showers might draw a little unwanted interest to a “home business”.

 

That is the point. For a company driver, per diem is an unreimbursed employee expense. Reporting it as a business expense is going to be considered fraud.

 

It is not about where the expenses come from. Once you have to start itemizing you no longer qualify for the standard deduction and can claim deductions on all of your income.