WSE - from my point of view

Thanks for the advice...trunch.

Yeah, we probably waited too late to start making phone calls thinking that sure enough, sooner or later, one of these morons will get us taken care of. I didn't think of calling the shipper. Oh well, so much for having faith in these guys.

So, we called dispatch, they called the broker, we called the broker, and after several phone calls back and forth, they have, at least in words, agreed to unload us tonight...of course it's getting dark here in NW VA now, so "tonight" could mean anything from now til sunrise...I guess.

And it is such a shame...one man, 10 minutes with a folk lift, a signature on a document, and we could be out of here.

I just don't see what is so difficult about something so simple.

 

Rollover,

I see tons of discussions here about per diem and it makes me want to specialize in trucker taxes and get back behind the desk. I, personally, do not think Per Diem is a very complex issue at all, but then again, I have been a CPA and tax jockey for the past 15 years...not a professional truck driver.

You have to read most all of this post to get everything in context and I think a pretty simple understanding of the issue. If your CPA is making this more difficult than it has to be to justify his/her fees...then you probably need to find another CPA.

Here's the deal with per diem pay...

If the company IS REPORTING per diem paid as TAXABLE to you (I would assume, they would also be withholding from that amount) then the amount of per diem "pay" (regardless of whether it is paid per mile or per day - as the words per diem indicate) is income to the driver/taxpayer. The driver/taxpayer would simply report the income on his return and take the FULL PER DIEM DEDUCTION on From 2106, Unreimbursed Employee Business Expenses (the total from the 2106 flows over to the Schedule A - Itemized Deductions and is used to reduce the amount of income subject to tax) That assumes that the total of the taxpayer's Schedule A Itemized deductions is greater than the standard deduction amount for his filing status).

I really can't imagine that there are companies out there who are showing per diem as a taxable income item because that is their whole reason for paying it as a per diem...so that it is not reportable for FICA/MC/FUTA/SUTA,etc.

IF YOU ARE NOT being taxed (that is, if the company is not withholding taxes based on the amount of per diem pay to the driver) and they are merely reporting the amount of per diem paid to you during the year, say, in Box 14 on the Form W-2, then you still do the calculation of your FULL PER DIEM DEDUCTION for the year (based on the number of days out times the standard rate (now $59/day) times 80%, etc.) and then reduce that amount by the amount the company actually paid you. Untaxed per diem is really nothing more than a "reimbursement" of your Meals and Incidental Expenses...(the rate is referred to as the ME&I rate). The rate was $52/day until October when it went to $59/day.

Technically, if the company OVERPAID you (meaning the amount paid as per diem was actually more than the total deduction allowed (based on your calculation of your full per diem deduction), then that excess amount is supposed to be reported as income by the taxpayer. Frankly, I can't think of any way that the IRS would ever police that UNLESS your return was examined for some other reason and the examiner found it. I also can't imagine that if that was ever the case, then the amount would not be very significant.

Now the counter to that argument would be to your benefit...say that the company paid you less than your FULL DEDUCTION AMOUNT as calculated as indicated above (and that you know and understand).

For example, let's say that the company paid you $10,000 in per diem in 2009 and the amount of deduction you were actually entitled to was $11000 (based on our calculation), then you would have $1000 you could deduct on Form 2106 (then onto Schedule A).

Box 14 on the W-2 is simply a box for information. It is not necessarily a report of an income amount. Box 1 is the taxable income box...in most cases.

Large per diem deductions are very common for OTR drivers and that, in and of itself, would very likely NOT draw attention from the IRS. It is a customary item on truckers' tax returns...just be sure to indicate your occupation on Page 2 of your Form 1040 as Long Haul Trucker or Professional Trucker Driver or Over The Road Truck Driver...or something of that sort. So many people wonder why they ask for occupation and this is a prime example.

With regard to audit risk...

Now, if you claimed a large amount of OTHER expenses (dog food because you have a dog with you, a personal DVD collection, a new wardrobe of Wrangler jeans and Dingo boots topped off with a new Stetson Hat because that is your "COMPANY UNIFORM", then you will likely raise an eyebrow or two which MAY result in a knock at the door...or at least a letter in the mailbox seeking additional information/proof to justify the deduction taken. Keep these things (and other items that you know in your heart of hearts isn't allowed but that you have heard can be deducted) off your return. This isn't really so - they just didn't get caught. If you do these things, in my professional opinion...you SHOULD be fine. Remember that the IRS will do some RANDOM audits...just like random drug screens...even if you are clean, you may get called in.

As you know, even if they do look, and if you are "clean" you have nothing to fear as you can easily provide substantiation for the deductions.

As an aside...talking about per diem, I actually ran the numbers on a couple of cases...a single taxpayer/driver with and without per diem as well as a married taxpayer/driver filing a joint return with and without per diem, and in both very simple cases, at the end of the day, looking strictly at cash-flow after tax, the taxpayer was better off taking the reduced TAXABLE rate per mile and the UNTAXED per diem as a portion of his pay. There will likely be cases where that isn't correct but in my examples it worked out that way.

Now the downsides are those that have been mentioned on several occassions here...lower reportable income thus making is more difficult to qualify for loans, reduced amounts reported to Social Security Administration for the HOPE for a future benefit, and lower reportable income in the event of a disability or worker's comp claim.

Wow, WAY MORE info than you asked for...but I really hope this helps...and do let me know if you have other questions.

 

Gosh...I can't believe it's been several days...let me see if I can recount them.

Oh yeah, the Verona VA saga...well, the guys on the dock finally did unload us on Wednesday evening. It wasn't the dockworkers' fault necessarily...they were just hard working guys making $8/hour who have to put up with Ms. Congeniality and the others every day. What a miserable bunch of folks...I honestly have never encountered such miserable people at any one place in my life. Any way, one of the guys was an FSU fan and I was wearing my FSU windbreaker...upon leaving, I chunked him a brand new FSU hat I had brought along in the truck. I am not really a hat wearer so it became obvious why I chose to throw it in my bag when I left home. He was happy when we left. Wow, so were we.

Anyway, we left there and motored out to Greenville VA to a truck stop for the evening. Our next load, a load of chocolate bound for UT was just down the road. Although we parked the night with the trailer doors open, it didn't help with the smell...those onions were still stinking to high heaven. Hershey will not load a dirty, stinking trailer. So, we headed out to a local company to have the trailer washed out and then headed to the shipper a couple hours early.

Great bunch of folks at Hershey in Stuarts Draft. Put us right in a door and loaded us a couple hours ahead of schedule. We were actually about 500lbs over gross but we were filled to the brim with fuel. This truck also has an APU which adds about 700lbs, so I am told.

So, we had to tiptoe around a couple of the coops and managed how much fuel we put on at our stops but we were fairly comfortable after burning off sufficient fuel. It scaled out just fine later on. Now we were set.

VA->WV->KY then a blow out on one of the trailer tires...2 hours for the repair, then motored on to IL->IN->MO stopping in Higginsville MO for the night.

Left MO on Saturday and motored through KS, stopping in Burlington CO for a little hole in the wall chinese restaurant there right across from a small truck stop. Very yummy and incredibly inexpensive...$7.25 for the full buffet!! what a deal...I highly recommend it. I hurt myself but it was my first real meal of the day...so I didn't feel too bad.

We then motored on to Commerce City CO just outside of Denver...my biggest mileage day yet...653 miles in a truck governed to 63mph...not too bad, eh? And I don't know enough to cook my book so that was all legal. (The cooking the book part was a joke, I will never lie on a log book...period).

My trainer has a Dr's appt back in AR on Wednesday so we didn't have time to take this load to UT so we relayed it to another fellow there in Commerce City. We left this morning for Monte Vista CO to pick a load of potatoes bound for Clarksville AR Wal-Mart. 4AM delivery on Wednesday...his appt is at 9 and it is a couple hours away...it will be tight but hopefully we can pull it off.

Anyway, I'll have to admit that I am really enjoying this "job"... especially the travel part. It had been 22 years since I had been to KS/CO and I had forgotten just how beautiful Western KS and Eastern CO really is. Breathtaking Views...If anyone is doubting that there is a God...he merely need only drive through that area and take it ll in.

We motored today from Commerce City south through Castle Rock, CO Springs, Pueblo, etc. Alamosa CO is a cool little town in So. CO.

It is pretty cold...I was walking around outside talking to my wife on the phone (I was amazed that there a signal out in the middle of no where). I asked her to look up Monte Vista weather online and she said it was 30 degrees with a feels like temp of 24. Gosh, no wonder I was freezing!!!! I am from FL for crying out loud. Anyway, temps in the teens are headed this way but luckily, we'll be back in AR by then.

That's pretty much it for now.

 

sure did...beautiful country...oh, and the hill was a breeze...i was mt.