Per diem Question

Given that unique situation, that $12,500 is supposed to be lower then if you toke the standardized per diem deduction offered to truck driver.

Lets try your example out and back figure with some assumptions.

A guy gets $6200 per diem reimbursed from his employer. In the usual scheme of things, something like $.10cpm is taken out of his pay and $.085 is reimbursed as tax-free per diem. So divide $6200/$.085CPM = 72,941 miles that driver did that tax year. If you take the driver average of 350miles per a day out you get 72,941miles/350miles@day = 208 days out.

Take that average 208 days out and multiply it by the allowance offered by the the IRS: 208 x $63 x .80 = $10,503.

While the $12,500 is supposed to be lower then the $10,503 the rounding of estimating piece work per diem may have some fluke cases where it is not. More then a few flukes, the companies per diem pay scheme will get audited.

That is about $2000 tax break with the per diem. Not as large as you are led to believe. Multiply that with the lowest tax rate of 10% and the per diem pay looks like a $200 dollar bonus, but don't forget almost the driver paid the company $.015 CPM accounting fee for this savings. 72,941miles x $.015 CPM = $1094. That is a net loss of $900 dollars in even this most unique per diem situation.

Most per diem pay situations are a loss all the way around.