Perplexed by forced per diem option?

That was an oversimplification, the full answer would take a team of IRS agents and lawyers to explain. In a nutshell the way it gets payed, the company get to deduct it, and the IRS won't allow a double deduction on the same money. This way the company can get even more of your money. My tax lawyer explained it better, but this is what it boils down to. There is some loophole in the code, but it went way over my head.

 

You don't get to deduct it, and this is important, BECAUSE YOU AREN'T BEING TAXED ON IT! The company isn't getting ANY of your money.

Take a look at my user name. That's a clue to the fact that I know what I'm talking about.

 

TaxPhd is right... it's a win-win. The carrier gets some tax benefit, and part of your income is shielded from taxation. All the better if you don't have enough deductions to itemize, because now you have a way to take advantage of the Per Diem deduction. That's as long as the carrier doesn't take an "administrative kick-back" negating your portion of the tax advantage.

 

VERY well put!!!!

 

I cannot see the worry about the workmen's compensation since it would most likely not be a material amount of difference due to the way they calculate it.

As far as unemployment, it is basically capped and most will draw the max as well.

I can certainly see the problem with taking a per diem where the company is charging a fee which is the point where they profit on something that is really not that hard to do in the first place.

A person really needs to see if the amounts will warrant any concern.

The only drawback is the limited intelligence that a banker has as far as the loan documents. If not in clear numbers and all, they do not comprehend.

 

Agreed, however throughout this whole thread both Scott and I have noted EXACTLY how these things are handled at our perspective companies, IF, the company these guys are working for handles it differently, OR charges an admin fee, then all bets are off(at least as far as I am concerned).

But I can tell by some of these conversations that a LOT of these people either;

A. Don't fully understand what they are talking about,
B. Are just repeating what they have heard on some forum, and have never ACTUALLY done the math,
C. Work for a company that is playing games with their deductions, and IF that is the case, arguing about it on here will get them EXACTLY NO WHERE!

There is NOTHING more frustrating that trying to help someone, that refuses to put up the numbers or examples that they are talking about.

We are OVER 20 freaking pages here, and every time one of these people that thinks they are getting screwed is asked to provide said example, all you hear is crickets.

Stan

 

The industry and the companies have brought this to the line where distrust forms.

In 1999, I took the per diem and there was no fee.

Now, companies have decided another point to stick it to the driver. Not saying your company does, but the industry as whole seems to do whatever it can to screw the driver.

The last company I worked for charged any com check transactions to the driver. Granted some might be getting advances, but I never take them. They charged me for the lumper fee and deducted it from my check. Paperwork was submitted with the load.

Their reason was they were not reimbursed yet.

 

I think being paid with forced per diem is a scam because the company is paying us with a tax deduction we would have gotten anyway. The companies contend that paying this way reduces our taxes..true but it's only financially beneficial if you're earning a lot per mile ...mid to upper 40 cents and getting 2500+ miles per week. Lastly, this type of pay scheme is so convoluted with paycheck deductions and additions that you have to be a CPA to figure out if you've been paid correctly. This is the main reason I am leaving Marten.

 

You hit it right on the head, bud. I've seen them do it more times than once. Why would they accept a per diem when their whole plan going in is to work six months and get fired, get on unemployment, and stay forever when the government keeps extending it. The extra tax they would pay from no per diem is far outweighed by the extra they can draw once they are on unemployment for one or two hundred weeks. And they don't care if it saves you any or not, so that is no big deal.

Here is an example, more truth than fiction unfortunately. The entitlement hound starts work about March. He works for six months, figures out a way to get fired, begins unemployment. Lives pretty well with unemployment plus welfare, adc, food stamp card, etc. Is on you the first business day of the new year for his w-2 so he can hammer down to HR Block to file his return. After all, his check for money he never even paid in is waiting in the form of his "earned income tax credit." Another reason for no per diem. That money will hold him over til March when example repeats again.

 

Don't forget the company saves money on worker comp insurance.

You calling me a bum??? Get fired in Florida or Tennessee? No unemployment! I last collected unemployment in 1985 or 86. Worker comp in 2005. Not trucking I had L5S1 blow out and had surgery. I was able to pay my bills on that no problem,
Roll the dice and hope you are never injured on the job! Got car insurance? It is there for the "what if." Got health insurance? It's there for the "what if!" Got lfe insurance? It's there for the "what if." Bad decision to take perdium. It can bite you on your butt.