Incorrect Per Diem Calcuation Turbotax

Its a deduction not a tax credit.

 

If you deduct $100, your tax doesn't change by $100. You get a percentage. Deductions aren't dollar for dollar.

 

What you claim come off your gross.

 

That sounds about right: you are taxed on ~30% of your income. Per diem lowers your income 1:1, which in turn lowers your taxes ~30%.

 

Sounds about right, but I’ve used Turbotax two years running and I notice that this year, I’m not getting anywhere with it. I’m going to have to find a tax professional familar with the owner operator deductions. My net income is only $40K and Turbotax is saying I owe $15K. I made the same income with the same expenses/deductions last year and I got all my quarterly taxes back last year so I don’t know what’s going on.

 

Find a tax person. If your tax liability is reduced to zero, you don't get back less than zero from Uncle Sam. What you WILL get back is whatever you withheld. Particularly over and beyond standard withholding.

We did 67K in 2001, We counted 306 service days out for the two of us as a team away from home. At that time Perdiem was 45 dollars per day flat. The total deduction for that particular line item came out to $13770 roughly. At that point whatever we still owed on that 67K was zero.

We in addition were paying 100 each to State weekly and 75 each to uncle sam weekly. Over and beyond zero W2 deducting. That came out to about 19000 dollars back roughly. That then formed a cornerstone savings for the new year of trucking. And so on. Stack and stack and stack. 5 years becomes 100K saved and so on.

 

Something's not right. On $40k, you should be ~$6k in SE tax, which leaves $9k for income tax....$9k on $40k net income is almost 25% effective tax rate, which is way off for $40k net income.

 

I think this is stupid. But thaks.