Per Diem?

All I know is it should be illegal if not already. And yes, companies charge for per diem can you believe that ####? That should be illegal itself

 

I still sit here asking myself whats better in the long run, is per diem better or is it better to just take the full cpm. Because $59 a day just because your not home adds up pretty quick.

 

The 59$ is misleading. It's 59$ of untaxed income. Which is a few dollars a day depending on your tax situation, for me it equals about 13$ a day I get back out of my return.

The last place I did that offered a per diem program, it was .2 cpm. 2 cents per mile @ 120k miles is 2400$ I average about 300 days out a year, and that equates about 3900$. So the difference is 1,500$. Then again I get the money sooner with the per diem thing. It's all choices.

 

Thats odd and confusing, when I was working in Texas for a different line of work we would go out of state. When out of state we got per diem pay so we got our normal paycheck which was salary then $45 cash per day. As soon as we got back to TX and went to the office we were given cash per diem for each day out. I loved going out of state.. Nice getting a double paycheck.

 

I opt out all year and do it at tax time

 

I've said it a hundred times if I've said it once. Per Diem is something you need to ask your accountant about not a truck forum. What may be a bad deal for one person could actually be a great deal for another. No 2 people on here have the same tax situation and therefore no 2 people on here will realize the same benefit or lack of from taking Per Diem.

If you really want to split hairs you can save all your receipts for EVERYTHING work related and not reimbursed by your company then at the end of the year add them all up then figure out your legally allowed days out and finally the amount of Per Diem taken. If you have more in itemized receipts than allowed standard deduction (highly unlikely for a company driver) you can itemize your deductions. If not you can use the standard daily deduction. Then take the amount taken in Per Diem and if you received more Per Diem than you have either in standard daily deductions or itemized deductions (whichever is higher) then do nothing, do not deduct anything. Now if the amount taken in Per Diem is less than the higher of allowed daily or itemized then you can claim the difference.

Example-
You are legally allowed to claim 275 days out for the year at $59 per day your allowable deduction is $16225.00
Your receipts total $12125
You ran 120,000 miles taking $.10 per mile Per Diem (my companies rate) is $12,000
So using those numbers the standard daily deduction is the higher of the two then subtract the $12k Per Diem and have an additional $4225 to claim on your taxes.

That's a very short and abbreviated breakdown of the deduction.

IMHO and I'm in no way a CPA or financial expert if your company offers Per Diem and doesn't charge for it then if you want to pay less in taxes each pay period then take the it. If a company charges for it, well that's lost money so I'd say opt out if that's an option.

And as far as the Per Diem making it look like you make less money when it comes time to purchase a house etc. That's a huge steaming pile of BS. Banks, mortgage loan officers etc. know how to read your tax return and it doesn't matter one little bit how the money was paid.

Now where drivers get in trouble and I see it happen all the time they take Per Diem then claim the full allowable standard daily deduction, don't pay a few hundred dollars to have a professional (and the one day wonders at H&R Block are not professionals, a professional will have CPA after their name) prepare their taxes then get hit with a $4k to $6k or more bill from the IRS then turn around and blame the Per Diem because they "lost money". They didn't loose money, they tried to double dip on deductions and got caught.

 

It's not even really $59 per day. It's 80% of $59 a day. At least that's what it was last year.

 

as of 10/01/15 the per diem rate changed from $59 a day to $63

 

So it's now 80% of 63? Why not just call it what it is.....$50.40 a day? Haha