LLC taxed as Scorp. Per Diem no problem?

Discussion in 'Ask An Owner Operator' started by Power Meister, Aug 6, 2022.

  1. Power Meister

    Power Meister Light Load Member

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  3. blairandgretchen

    blairandgretchen Road Train Member

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    As if should and IRS then income
    probably included fine.

    Hope this helps, I think I covered all points given the question asked.
     
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  4. Power Meister

    Power Meister Light Load Member

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    So if you pay yourself on W2, say 50k (notwithstanding the other deductions), the aggregate of the Per Diem ( $59 per day) is subtracted from the 50k, and you only pay the 15.3% self-employment tax on the remainder? So, say you stay out 334 days per year, then: 334 * $59 = $19,706. 50k - $19,706 = $30,294. Thus, only $30,294 is subject to the 15.3% self-employment tax, correct?
     
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  5. Kshaw0960

    Kshaw0960 Heavy Load Member

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    I have an LLC taxed as an s-corp. I pay myself a W2 and the company is the one that takes the per diem deduction.

    My tax guy says it’s supposed to be this way and he told me why but I forgot. Been doing it for years.
     
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  6. KrumpledTed

    KrumpledTed Light Load Member

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    This is how I have mine organized. Never had issues.
     
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  7. Power Meister

    Power Meister Light Load Member

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    Makes sense. Maybe the IRS looks at the Per Diem as a company expense to pay for the employee's meal expenses. The company then forwards it to the employee, but not as taxable income. Rather than the employer paying each place the employee had a meal at. So it looks like the company does not have to pay tax on Per Diem, and the employee also does not have to pay tax on Per Diem. Correct?

    Also, what is the max Per Diem amount tolerated by the IRS, $59 per day?
     
  8. 77fib77

    77fib77 Road Train Member

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    As of January 2021, the per diem allowance is $66 per day in the continental United States. However, if you deliver goods outside the continental U.S., this rate increases to $71per day. The IRS currently allows owner-operators to deduct 80% of the per diem rate.
     
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  9. Power Meister

    Power Meister Light Load Member

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    And that 80% is deducted from the company side income it appears.
     
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