K&B TRANSPORTATION (S. SIOUX CITY, IA)

It isn't that simple. It isn't a deduction versus no deduction, but also the size of the deduction. My last paycheck was 5 days for 1593 miles at 41 cpm making $653.13 in mileage pay. I pay $26.31 in federal withholding on that. I get 4 cpm per diem making $63.72 per diem. That $26.31 is about a 4% effective tax rate so that $63.72 tax free gets me $2.55 in tax savings. If I didn't take that I could deduct $50 per day making $250 in tax free income for the week or $10 in tax savings. Using that cpm per diem cost me $7.45. Paying $10 less in taxes is better for me than $2.55 less in taxes. Does that makes sense to you? You can do the same calculations with your own paycheck.

I read some of the above but that point seems to have been missed. Now if they deduct a 1 cpm handling fee then I lost $15.93 in income to save $2.55 in taxes. Now there's a deal.