Why per deim here but not per deim there?

how much it does or does not make a difference depends on your situation. i know this is not the intent of your thread, but per diem was pushed on drivers as a "no brainer" in one company i worked for. they said "would you like 10k taxable income or 8k untaxable?". i replied, "ill take the 10k please" and was basically told i was an idiot. what they dont factor in is this.... if you are the sole provider for a family that includes 2 or more children, your taxable income wont start til somewhere around (42k?...i forget the magic number). many companies CHARGE for per diem, taking away more cpm in taxable income than they give in non taxable income. for each penny they charge you, it costs $1250 per year based on driving 125k miles. as i remember it, they were charging 2cpm...or $2500 per year. forn this i would be given the "gift" of 9cpm untaxed income.

well, in order for a family with 2 children to pay $2500 in taxes, you would have to earn over $55000 for the year (in 2012). $56000 gives you a total tax liability of 2605, and this assumes a standard deduction, and no ira contributions.

in summary, a truck driver married with two kids that is the sole provider shoulde NOT just blindly take the per diem pay. if its your 1st year as a truck driver (married with 2 kids), its safe to say it is a BAD DEAL for you to take it. they WILL charge you more than you will save.

 

I would never work for per diem. You get to take the deduction for your days out on the road when you file your taxes if you do not accept per diem pay. Even if you DO accept per diem pay, you'll STILL have to figure out what you WOULD have deducted had you not been receiving per diem. If too much was paid in per diem, you now owe taxes on the difference. If not enough was paid in per diem, you get to deduct the shortage. Either way, you're still getting the same taxable income at the end of the year unless the company is playing games as pokerhound suggested.

If you REALLY need the "extra" money in your check each week, just claim an extra deduction or two on your w-4 so that less money is withheld from each paycheck. If your refund at the end of the year is more than a couple hundred bucks, you should do that anyway...the government doesn't pay interest on your over-payments, so why would you want to give them more than you should actually owe each week in what is essentially an interest free loan? That $2000 refund was nearly $170 extra per month that you could have had to pay your bills....or to save in an interest bearing account where it could have grown to more than what you got back if you hadn't over-paid the IRS.

 

Companies offer per diem because it lowers the amount of payroll taxes they have to pay. They can effectively lower the total cost of employing you, and make you feel like you're making more money. They aren't doing you any favors, they are screwing you in the long run by paying less into social security.

 

They aren't screwing you. You can put that money from Per diem in a savings or whatever. Social Security is not even guaranteed to be around. Neither are you. So you can get what's coming now. Or you can get it when you do your taxes at the end of the year. I'd rather eat today then wait until the end of the year. IMHO

 

Like I said, all you'd have to do if you want the money now is change the number of deductions on your W-4 so that they withhold less each week. When you are paid a per diem as a reimbursed travel expense, it is not included in your gross earnings on the W2. If you received $59/day and spent 300 days out per year, that is nearly $18,000 that won't be reflected on that W2. If you think you might be in the market for a new home or a new car, you'd be a fool to think that $18,000 missing from your W2 won't make a difference in whether you get approved or not.

 

Dude some of aren't worried about those things. We have pay stubs who show everything. Also if your ex wife is trying to get you for child support. That 18,000 not showing helps out

 

...definitely got a point there with the ex-wife. I don't have one of those, so I didn't even consider that possibility.:smt023

 

like everything else each to his own
i maxed out on how high my SS will get eons ago
so makes no matter to me
but as a lease/rent/schmuck still doesn't matter