Per Diem for truckers? Yes or No

Sign anything?

 

Are they requiring a kick-back for the "privilege" of paying you per diem?

 

If you want to work for them, you will have to accept their pay method. There are no laws that state HOW you get paid, just that you must be paid for work done.
If you are young and unencumbered, per diem isn't so bad.
However, if you are planning to purchase a home or car, the lower GROSS you will show as earning's could affect your chances of obtaining financing.
If you are older, then per diem is a bad choice. The lower GROSS will drop your annual earning's, which then will lower your average for figuring social security payments.
Giving per diem only helps the COMPANY, becuse they pay less SS taxes and less unemployment insurance. Makes their bottom line look better and increases the bosses salary.

 

Not necessarily... in the case of a single driver who doesn't have enough deductions to itemize on his/her tax return, the only way to benefit from the per diem deduction is to have some of their pay given to them as a per diem payment. They recoup the loss of the tax deduction in lowered withholding.

However, buzzarddriver is correct - there is a downside...

 

Well since Social Security is equally paid by the driver and the company it saves both the driver and the company on their tax burden.

I mean SS should be abolished or at least optional but that is another discussion.

 

If you take what the company pays you in per diem and subtract that what you are legally allowed you can still take the difference.

Any company will never meet the basic rate allowed for drivers daily. If they exceed it then they loose their ability to use Per Diem standards.

You are allowed a basic flat daily rate, except for the days you are going/exiting your home of residence for home time and then you are allowed 75%.

The company figures by your trip, the federal government figures by day. Simply keep track of how many days on the road you have been.

If you are within 10 years of retiring then Per Diem will lower your gross for SS.

Mark

 

The simplest answer for whether you should take per diem or not is as follows:

Do you have a mortgage?

Yes: then the homeowner deduction works to your favor so decline per diem.

 

That's one of the big factors... most single drivers don't have enough deductions to itemize, so you loose the value of per diem - unless you're paid that way.

 

I really paid attention when I did my taxes this year. More so than I usually do.
I own a home, and can almost itemize even without my perdiem deduction.
So this year when I did my taxes I really watched how much my perdiem deduction helped on what I got back from the tax man.
My deduction (before being reduced to 80%) was around 16,000. If I did my taxes without this deduction my return was 1,000 dollars less than it was with it.
So the way I look at it. As long as they do not give me way too much perdiem. And I still have a few thousand I can claim at the end of the year, I would almost rather get the money in my checks. Since even if it was 5 cpm it would add up to ALLOT more than a grand. Even if I only ran 120k and the perdiem was 5 cpm. That would be 6,000 in my pocket.
Now I have to say. If they charge me more than 1 cpm for being able to take perdiem, then I would not take it. They are just being greedy then.