Per diem or not per diem? with Gordon Trucking

I can see it happening.

Some people like myself have no mortgage interest deduction. Paid for.

Others may only rent.

Even so, I am not one to support per diem in the pay in any form.

 

As a truck driver (company driver) many do not have enough expenses to be able to itemize on their year end taxes. I ought to know - my husband has been trucking for 24 years, and we are one of the ones that are unable to itemize each year. We use a very reputable CPA firm and are quite aware of what we can and cannot do.

This happens many times - usually due to the following types of scenarios . . .

1. Wife works, too - making a good wage.
2. Kids are grown - no deductions for dependents - other than married couple
3. Mortgage almost paid off - or nearly - so that there is very little interest owed anymore
4. Medical bills covered under a good insurance company plan - not enough deductible / uncovered expenses to meet the IRS minimum.
5. Truck driver is a company driver - no truck expenses

We have not been able to itemize for almost 10 years now - the per diem offered by a company is better than no deduction at all.

As far as Social Security benefits - that's basically a joke anyway. There is no S.S. trust fund - and the federal government is so far in the hole that we will be lucky to see even a few cents when it comes time to retire in about 10 - 15 years. I'd much rather get the per diem offered by a company, getting more in my paycheck each week, paying less taxes now - and putting the extra money into a 401K, or savings - we would be better off by far.

 

I say not to per diem

 

SS is not based on your last 5 years. It is based on your highest grossing years.

Are we sure the do not pay SS tax on per diem? Even though your 401K is tax free you still pay SS on it.

 

Since when?

We always used to plan the last 5 years for maximum earnings to increase the overall Social Security.

The theory is that these would be the highest earning years.

The per diem allows the company to not pay the SS tax on the exempt portion. Originally, the 401 K was to be that way, but they quickly changed it.