Schneider Drivers Please Help

Your best bet to know if it is for you or not is to talk to your cpa. Honestly when it comes to money, asking on here is...well pointless. I'm on the per diem plan, it works it great for me, but it's not for everyone.

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It works for me tax wise, plus with my child support. I see a bigger check each week after all my deductions come out. My tax base is smaller, so I pay less in taxes. Will this affect my social security? No because I doubt it will be around when I hit that age. As for loans, I haven't taken a loan in years. They say it will affect work mans comp and such, but I keep a portion of my per diem pay put aside for things such as if I am out of work.
Like I said you need to talk to your cpa or tax person abut if it would benefit you or not.
As for not being able to use your deductions, if your per diem is less than what you would claim, claim the difference. Then add in all your expenses. If it's more than the standard deduction, use it.

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I've had some experience with per diem rates before, not in this business, but the same rules apply.

So by adding your numbers together .19+.14 you are being paid a rate of .33 correct?

The way it works is this. The first.19 of each mile is passed directly to you, pre tax. No ss tax, medicare, local, state, nothing. This is beneficial to you because you take home more money per paycheck than if you were taxed on the whole .33 It is beneficial to your employer because they do not have to pay into workman's comp for that .19, or any other associated taxes for that .19 on their part. You get more money, they save more money.

The .14 you earn is taxed just like an ordinary paycheck. You pay taxes for ss, medicare, local, state, federal......Beneficial to you because again you are being taxed at a lower rate so you make more money per paycheck, Beneficial to your employer because they pay less.

So, you make more per paycheck, pay less in taxes, everyone is happy right?

Well not so fast, hold up, think about it for a second.

How per diem is not beneficial for you; At the end of the year, your per diem was a working benefit, it will not count towards your earnings at the end of the year, only the .14 will. So the way the IRS sees it, you were only being paid .14 a mile, this will keep you in a lower tax bracket so less taxes.

Lower tax bracket, less taxes, bigger return

Still Happy Right?

Well lets say you step out of your rig one day onto some uneven pavement, you feel a "pop" and the excruciating pain, go to hospital, broken ankle and can't work for 3 months (random time frame). So you have to file for workman's comp. Workman's comp only pays 66.6% of what you "earned", and guess what, according to the IRS you only make .14 per mile. So they take the average miles you have driven per pay period (week for examples sake) over the last 90 days, but hey you only get 66.6% of .14 mile for that average or .09 mile, say you average 2800 miles a week 2800x.09=$252 week

So to compare if you paid taxes on the whole amount of .33 66.6% of .33 is .22 (rounded up from .2197) same 2800 average 2800x.22=$616 week on work.comp. a difference of $364 week.

Ouch right?

Same thing for retirement. I'm not going to break into the math, but when it comes time for you to retire, guess what, it is going to be figured out on your .14 not the full .33

When you go to get a mortgage, you can claim the .19 under the "source of other income" box on the application, but each mortgage company has their own rules and regulations as for figuring out how they use it, some just flat out count it a disposable income, meaning you have it today, but it could go away tomorrow type of thing. Same thing they do with someone who works 45 hours every week, they adjust the income for 40 hours because overtime is expendable.

Want to buy a car? Awesome so do I, but here we go again. Most Car companies will accept the full .33 rate under "non traditional pay rate" rules. Same as a waitress who only gets $3 an hour but makes ten times that in tips, or the Barber like me who gets paid cash with no stubs and so forth. Basically the car dealer will ask you to provide all your paystubs for x amount of past pay periods, so they can establish a history of the additional .19. Because of it being a non "traditional" source of income, this will eliminate you from those awesome low interest rates you see advertised on tv, this will restrict you on your monthly payments usually to a max of 75% of what you average a week in take home pay insted of the 100-120 normal customers are granted, so that reduces your buying power, oh and that interest rate i mentioned earlier, gonna be slightly higher than someone with same score with a "traditional" income say they get 6% (random number) they are going to give you 7.5%(random number) because your income is non "traditional" and seen as a bit of a risk.

So if you are still reading this, I hope I have helped. About 4 years ago, I picked up a contract to work in a Barbershop on a military base for a year on a part time basis. My pay was 50% of each haircut (averaged 3.50) and out of that money the Government paid me the first $2.25 was paid on a perdiem basis plus tips, which is a whole other ballgame for another discussion. I thought it was great until I went a did my taxes. We were in the process of refinancing our home, thats why I took the second job in the first place to help with that, it ended up hurting in the long run, would have been better not to have taken that job in the first place, so when the contract was up I didnt renew, wasn't worth it.

Hope this helps, if you are still alive and didnt catch a seizure from reading it.