Should I have canceled my Per Diem?

A lot of those companies are doing the per diem thing. They pay around .20 a mile the subtract .02 cents for some kind of gubment garbage then give the driver .12 cents a mile per diem. The company is actually paying the driver $.18 a mile but the driver thinks he's getting $.32 a mile. Just another way the driver gets bent over. If the driver takes the per diem he doesn't qualify fo the $60 a day tax write off.

 

That IMO is the Proper way to do per-diem (if you are going to do it)...When I was flying as a pilot, that is the way it was done (a separate check, and a daily/hourly rate for per-diem for the time your are away from your domicile) The $39 is easy to keep separate, and is not taxable (as long as you say you used 100% of it if ever asked)....
The great thing with the way your company pays it, is if you don't drive much, you still get the same $$. With the CPM Per-diem, it is possible to get more/less than the legal per-day limit.

Consider perdiem as untaxed income you get to cover expense that you would not have had if you were living at home, doing an office job...think things like meals, laundry, etc. The danger is some folks get used to living on the per-diem as a sizable % of their income...and this does not appear on you taxable income for calculations for unemployment, Social Security, disability, loan/mortgage qualifications, alimony, and child support. So some possible advantages, some disadvantages.
If you are not given Per-diem in a traveling job, a good accountant can show you how to take the deduction at the end of the year...with the same disadvantages, but it is a bit of a savings in $$ to uncle Sam. Many companies charge the driver .01 CPM for the accounting...some pay you an extra .01 CPM cause they save MUCH more in not having to pay their share of the Social Security/FICA match.....

 

Per Diem is suppose to be additional pay to cover expenses on the road. For example government employees and contractors get $77 for a motel and $46 for meals for each day on the road. I once worked for a gov't contractor (nondriving) and we got a seperate per diem check every week on top of our regular check.

Of course trucking has found another way to screw the drivers. They use part of your own pay and call it per diem so they don't have to pay you extra. Meanwhile they are getting a tax break for doing that. Drivers that take per diem you see where you make .17 a mile and Joe Driver without per diem makes .29 a mile has a legitimate complaint. Your paycheck should actually be your regular pay rate plus an amount equal to about .11-.13 cpm added to it. All you get now is a tax break on some of the money you earned. It amounts to about $7 a day. Does that cover your expenses?? Maybe if you eat hot dogs everyday. Just like labor laws, the IRS has seperate laws for truckers.

The way they do it robs you of SSI paid in, 401K paid in and might lower the amount you can borrow from a bank. Disability, unemployment and workers comp claims are based on your pay. So you get robbed there. When a company pays you per diem, they are required to put it in the miscellaneous box on your W-2. If you note on your W-2, you won't see any per diem reported. Thus tax time, you can do what I do and itemize and claim the daily per diem rate. Any trucker can get more back itemizing. I file 0 and pay an extra $20 each week. I usually get back $2000-3000 every year.

 

If the base pay was .43 cents a mile and the per diem was .11 it would be fair in my opinion but to take away .20 cents then add .11 back to it is mind boggling how anyone would agree to this. I think these outfits are placing bets to see how gullible we really are.

 

Another angle to consider in these per diem plans is in the event of an audit can you substantiate the per diem your company paid you?

The key to qualifying for per diem is you must be away from your tax home AND take a required break before returning to your tax home.

In other words if you leave out Monday morning and return to your tax home (house or home based terminal) Monday night then you would NOT be eligible for per diem for that day.

It is a cleaner deduction when the driver understands the regs (or at least has a competant tax advisor who does) so they may calaculate the maximum allowable daily per diem deduction.

In some cases the company may under pay the per diem in which case the driver will be able to claim the difference as a deduction.

On the other hand if the carrier overpays the per diem then the driver may have to pay taxes on the over payment (if it is caught).

Drivers, you are not geting a "benefit" from your employer when they do this. You are getting rooked, bamboozled, taken, ripped off, and screwed ESPECIALLY if the carrier has reduced your compensation to offer this "benefit." Do not allow a company to rip you off. If you do then you have no one to blame but yourself.

The sad thing is you will have some fellas claim; "yeah, but I get more take home in my pay check each week." Had you claimed the correct number of deductions on your w2 your weekly paycheck would be higher in the first place and you would not be giving Uncle Sam a tax free loan all year.

 

Twitch,

I sent you that lead for Saddle Creek !!!!

Follow up on it, if you want a decent job, home daily, decent money...........

or stay at werner, Your choice..........

 

Do we always have a choice to either have the company per diem or our own? Can we choose not to go with the 'company' plan? Or are there some companies that do the per diem whether you want it or not?

 

Depends on the company...
Some make it mandatory...some make you start with it, then let you withdraw after a period...some don't offer it, so you can do it yourself come tax time.

 

Don't have time to read but talked with my accountant and for a person filing single head of household on taxes working in trucking you get an extra $2100.00 a year by not taking Per Diem due to the fact we would need to give up a penny a mile for it

 

something to think about with this per diem stuff is that when they lower your wage to .20 per mile then pay .15 per diem that .15 does not count towards unemployment or L&I and the bank doesn't have to count it when you apply for a loan so who gets the short end of the stick