Question about per diem

Easy question, tough answer. Per diem is not taxed by your employer. At my company, our mileages rate is .52 cpm. I think 17cpm is per diem. I am only taxed on 35cpm, so you could say, I'm getting some money for free by not having to pay taxes on all of my pay. The thing is, I cannot claim the tax deductions that I would otherwise be able to get from the IRS. I think last year that would have been $62 for every day that I was working. At the end of the year, that number gets to be pretty large. You don't need receipts for that amount, but if you have more than that you will. It really makes a huge difference when your tax bill comes due. I was only not on per diem for about half of the year, and my tax guy came up with nearly $20,000 in deductions just for work. That really makes a big difference for your refund. You'll be taxed a little more during the year, but at the end of the year, you will notice the difference. Your pay won't change, you'll still get whatever pay rate you and your company agree to, you will pay a bit more in taxes at first, but at the end of the year you'll be happy. If your company pays you per diem, they take all the tax deductions that you would be entitled to

 

In other businesses "per diem" is additional pay above and beyond your salary … not so in trucking.
Wouldn't it be nice to receive your 50 something cents per mile and 63 dollar a day as a co. driver?

 

Free money! Who hands out free money? Certainly not trucking companies. Where the hell have you been?

 

Per diem is not free money, it is money to cover business operating expenses.

 

You explained it well. In other industries they don't "rob" you of your per diem. On my current gig I get 184.50 a day in lodging and food per diem. When I drive truck, the company I work for show it separate income that is tax free however if you truly count it as separate I'd be making peanuts. Just another example how trucking companies ship cheap freight and use us as slave labor.

 

Claiming per diem at the end of the year does not entitle you to 63 bucks a day. It simply means you spent 63 bucks of life expenses and of that 63 bucks you won't be taxed on. So really you get maybe 10 bucks back a day.

Also remember that claiming per diem is telling the government you made much less a year than you really did. 300 days OTR is 18,000. You do not receive 18,000 check at tax time you simply took a tax break on that 18,000. You would get a check for maybe 2,000 if you are lucky.

Claiming per diem will also affect your social security , if you believe it will be around for you or not. To each his own.
I kind of think per diem is a scam, what they make it seem like verses what it really is. A lot of hype for not very much.

 

Per diem is not a scam. It is given to employee to offset cost of paying for increased cost of living while working away from home over nights. It is additional monies onto of normal pay! It is trucking companies that include it part of your normal pay and the only benefit is a lower tax burden and also has the negative aspect you pointed out. For example if I get 56 dollars a day food per diem that is 56 dollars added to my normal day salary. If I get full per diem like I do on this job I am getting 184.50 per day for my area of work. In trucking, the companies scam it and apply it to your pay and in reality your real pay is what you make short of per diem. So really you may be making less cpm then you think you are making. For more info check DOL on per diem. And yes I am making 5535 a month in per diem on top of my reg pay.

 

Consider who is trying to talk you into per-diem. Then consider what their possible motives are. Then consider what your possible positives and drawbacks are. Then FOR GOD'S SAKE .. research per diem and ask what your company will effectively charge you for the "privilege" of letting them (the carrier) save money and increase profits, at potentially your expense.

It's complicated, and every company has different approaches to "the sale". But bottom line is, they are trying to reduce their employer tax liability and workers comp premium. You can effectively do your own "per-diem" by leveraging all available tax deductions and means of reducing AGI (standard daily meal allowance), that is available to truckers, and it won't "cost you"

 

Obama Money!!!
(Sorry, just had to)