Pay and new per diem

Again, how? If your net revenue is higher and your taxable income is lower, your tax liability is lower at filing.

Less taxable income = lower taxes = better.

 

They take the per diem off and tax that, then add it back to show gross.

At filing you grossed 45k, but only paid taxes on 30k. That extra net actually is tax.

I noticed my net was about $100 more, but my tax paid that week was about $100 less than it used to be.

 

I'm sorry, but you fundamentally misunderstand what M&IE ("per diem") is.

M&IE is a reimbursement for expenses an employee occurs during the performance of his job related duties. It is not wages, it is not taxable income.

By paying an employee "per diem", a company replaces taxable wages with non-taxable money. Your gross stays the same, your taxable income goes down, and your net, necessarily, goes up. You make more because you owe less taxes (and the company reduces it's taxes, too).

There is no catch.

 

I misunderstood. I thought they were pulling a fast one on me.

 

Just my 2 cents, there is a catch, you will get less in Social Security later, if you are hurt, less in Workmans Comp, and if you are eligible for Unemployment get less. On top of that, if you need to rebuild your credit, but a house, you can't claim the per diem as income.
You can claim $63 a day by IRS rules, instead of the lower cpm rate. The cpm is usually less of a deduction, and what employers don't tell you, you can lower your withholding amounts on your W4, take home more, claim the $63 a day at the end of the year. They won't because it cost them money.

 

Doesn't make any difference what one posts. I could say I'm driving 3,000 mpw @ 80 cpm and there will always be some hotshot yahoo ask why I'm working for peanuts, and will say this in a totally "serious tone".

If you're happy and content with what you're making, enjoy your job. Too many in the world in miserable jobs struggling to live a meager existence to be trying to keep up with the Jones's

 

Oh you had me thinking to hard, I guess?

 

Yes, but... and No, you can't.

Yes, you and your employer both contribute less to social security, and yes, you will draw less when hurt on the job. Yes, you will qualify for less credit. Yes, if you become disabled, you will draw less SSI disability.

But.

The other side of that coin is that social security provides a 1% return on your money. In some cases, it is actually a negative return: you barely get back what you put in. If you take the money you would have put into Fica (7.5% of your income) and invest it, you could return 10 times as much. Same with disability. Take the money you save, and buy a long term disability policy.

In other words, I'd rather rely on myself than on the government to manage my money.

To your second pont: no, you can NOT deduct $63 a day as a company driver in 2018. The ability to deduct un-reimbursed expenses of any kind went away. Business owners (O/O's) still can on their Schedule C; wage slaves can not.

But, to that point, taking the per diem from the company preserves your new, higher standard deduction (12,000 per year), so you can have BOTH your standard deduction and your per diem. A gift from the tax man, for sure.

 

So what about 1099 pay? Does day rate deduction apply?

 

A 1099 relationship, by definition is not an employer-employee relationship, but a business relationship.

Therefore, if you get paid 1099, you run a business, file a schedule C, and yes, you can deduct Per Diem.