Trucking co's useing per diem

my per diem is .08 cents per mile, all it is is you dont get taxed on that .08 a mile so it puts 2.4 cpm more a week in your pocket take home, you still get the .08 each week and every week just not taxed. so if you run 120,000 miles that is 2880.00 pe week over the year in your pocket to spend. plus you can still deduct 45.00 a day for every day you are out at the end of the year so if you are out lets say 300 days thats 13,500 you can use compared to 300 x 59 = 17,700 for a 4200.00 difference, and at your tax rate you have to decide if taking the 2880.00 home in your pocket is better then a 4,200 extra write off for you

 

ive done taxes as a career before, but im not a cpa. i did run the numbers, because i THOUGHT there were instances where it helped the driver. i was pretty much wrong. lets look at an average driver...

joe average runs 125000 miles, stays out 315 days, and earns $50,000. his company offers per diem, but takes away 1cpm MORE than they give back in perdiem pay (least ive seen is actually 2 cpm). right off the bat taking per diem costs him $1250.

at the end of the year, he does his taxes. irs allows $59 per day meal allowance (some also refer to this as "per diem"). times 315 days is $18585. times 0.8 (only 80% is allowed as a deduction for people governed by hos rules, 50% for all others FOR THE MEAL ALLOWANCE) is $14868. minus 2% of gross salary (on schedule a you have to subtract 2% of household income before taking itemized deduction) leaves $13868.

so,before even CONSIDERING any other unreimbursed employee expenses (work gloves, tools,gps, cell phone, etc,etc,etc) joe ALREADY has a larger itemized deduction than standard deduction allows for. thus, taking the company offered per diem pay does him NO GOOD. taking a company per diem takes AWAY from the irs' meal allowance deduction. unless you stay out FAR FEWER days than most, per diem pay does nothing to help you.

the irs tax forms are all online, and anyone can easily run these numbers as i have, using their own personal estimates. the ones you will want to look at are the 1040, the schedule a (line 21), and form 2106 (meal allowance on line 5)

 

O.K. I see. Taking per diem reduces the overall compensation that shows up on taxes, SS benefits (if we still have it) later on.

It may be alright in the shortrun because it appears that a person is making more money up front but later on they pay the price.

The company gets to right-it-off as an expense.

 

and legally you have to declare the per diem pay as reimbursement for meals. see form 2106 instructions "reimbursement allocation worksheet" on page 3. so no you would not be allowed to still take 45 a day as a write off.

 

The only way I'd ever take Per diem is, You and the wife split and don't want to pay her alimony(not talking child support) or if you have a judgement against you garnishing your wages.

 

Hell. I only eat $10 a day in food. Been doing it forever. Except for the occasional steak, mash-potato and salad dinner of course.

Macaroni and cheese, tuna or turkey sandwich mostly.

I'm a cheapskate though.

I don't need a per diem. I'll take the cash.

 

i am on ssi and a fellow driver i worked with is too. he was taking per diem on his high 5 years i was not. his ssi is about 450 less a month than mine. he is not to happy about per diem now. but a young driver might say wont be there for me when i get there,so i am gonna take it. my personal thoughts is, its not a good thing for the driver in most cases.

 

dont even put workmans comp or ssi into the picture...the fact is in most cases it means LESS money in your pocket at the end of the year. again, in regards to otr drivers only, ones that are out on the road for nearly or over 300 days per year. your WEEKLY paycheck can be adjusted by taking claiming more deductions. but at the end of the year is when it counts. how much did the government say i owed in taxes for the year. per diem cuts down on that number, sure. but it does NOT cut sdown on that number as much as NOT taking per diem, and then filing taxes using itemized deductions.

 

I dont think that you have to be a certified accountant to see that you are getting screwed by these companies that are using per diem. Even if you are able to write off 75% of your daily per diem, as you say, that still leaves 25% that youre getting screwed on. Come to think of it, talking to an accountant would be a great idea. Anybody on/or considering going with the per diem pay should ask their accontant about how it works. Once the accountant tells you exactly how you are being taken advantage of (yet again, ONLY for the companies' benefit), perhaps you will do the right thing and stay as far away as possible from the per diem pay, up to and including moving on to a different company.