Per Diem

[newbieTrucker]

can some one explain a what per deim means it sounds really confusing

Thanks!

[Uturn2001]

It depends on how it is used.

1. Per diem can refer to a amount that you can deduct from your taxes for food, beverages, etc while you are away from home. Last time I checked it is 75% of $52 per day is how it works out for the basic deduction, or if you like to save reciepts you can claim the 75% of the actual amount.

2. It can also refer to a portion of your pay that is not taxed "per diem pay". How this generally works is this. Lets say you make a base rate of 30 cpm, and your employer is doing a 15 cpm per diem. 15 cpm is taxed fully, the other 15 cpm is not. Think of it like an advance on your tax refund.

The downside to this is that when it comes to anything that looks at your taxable income, ie loans, workers comp, unemployment, in some cases vacations and certain other tax breaks, you will be showing less than what you actually are making. Also some employers pay less of a base rate when they pay per diem saying you will still have a bigger paycheck.

[newbieTrucker]

Thanks for the valuable info it really clears things up and explains a lot. Because i used to work for a telecom company that paid Per Diem ( 100 a day for a minimum of 6 hours + my hourly rate ).

It was good money but when i filed for my tax return i found out that i was getting little or next to nothing as compared to what i had spent
( it was a figure of about 6000 that i had receipts for and only was getting a refund of about 1300 )

I know the fact that i'am single plays a big part ,but i put my parents down as dependants ( i help them with some bill every now and then) is there anything that you could suggest that would or recommend as to why my refund could be so lousy .

Thanks.

[Karnajj]

Thanks for the valuable info it really clears things up and explains a lot. Because i used to work for a telecom company that paid Per Diem ( 100 a day for a minimum of 6 hours + my hourly rate ).

It was good money but when i filed for my tax return i found out that i was getting little or next to nothing as compared to what i had spent
( it was a figure of about 6000 that i had receipts for and only was getting a refund of about 1300 )

I know the fact that i'am single plays a big part ,but i put my parents down as dependants ( i help them with some bill every now and then) is there anything that you could suggest that would or recommend as to why my refund could be so lousy .

Thanks.

Yea, refuse to accept per diem pay. It is a rip off anyway you look at it.

[Sealord]

"i put my parents down as dependants" The support to your parents better be more than 50% of their needs or the IRS won't like you. BOL

[madii'swife]

"i put my parents down as dependants" The support to your parents better be more than 50% of their needs or the IRS won't like you. BOL

And your parents better not be trying to file their own return...otherwise you putting them as dependants will screw up both returns.

[flood]

Uturn2001 you forgot to point out that later in life when you put in for social security, it is based on TAXABLE income.

you get a little bigger check now and later when you could use a little bigger check you don't get it.

it only works for people you care about how much money thay will have on friday not how much money thay will have 10 years from friday.

[redsfan]

Uturn2001 you forgot to point out that later in life when you put in for social security, it is based on TAXABLE income.

you get a little bigger check now and later when you could use a little bigger check you don't get it.

it only works for people you care about how much money thay will have on friday not how much money thay will have 10 years from friday.

IMO, SS would be a small factor in the decision. Anyone who is putting all of their eggs in one basket such as SS is plain nuts. IMO, You would be far better off to take the per diem, invest it in a 401K or something similar and plan your own retirement rather than let the government do it for you. That is unless, your comfortable with spending your retirement years getting by on 800 bucks per month.

I took the per diem option, got the tax-free bonus on a weekly basis and just did our taxes the other day. Guess what, we're still getting back 3200 bucks from the feds. Last year we got back about $2800. I may have a few more write-offs than the average Joe (we have a small farm and a small business on the side plus 3 kids), but it would work out just fine for many others also.

Per diem can work for or against you depending upon your circumstances. It is not a total rip-off any way you look at it, but it could be. One thing is for sure, it will benefit the company you work for, but it may or may not benefit you. If you are looking for whether it will work for you or not I can almost guarantee you will not find the answer here. Do your homework, call a CPA or someone familar with your specific situation and find the answer for yourself.

[flood]

"IMO, SS would be a small factor in the decision."
that is true redsfan all i was saying was uturn2001 needed to add it to the list.

"Anyone who is putting all of their eggs in one basket such as SS is plain nuts."
again very true.

" invest it in a 401K"
only if thy match and only as far as thy match remember when you take money out of a 401k it is taxable income. the money you put in was pre-tax. a IRA is better as the money you put is post-tax so their is NO tax when you take it out. you also have better options.

" or something similar and plan your own retirement rather than let the government do it for you."
very true

"That is unless, your comfortable with spending your retirement years getting by on 800 bucks per month."
i could live OK on $800 right now if i wanted to. but then the house, land, boat, both truck's, car's, bike's are all paid for and i paid CASH for all but the house & land. but as i have over $700,000 sitting in retirement i don't think i will have to.

"I took the per diem option, got the tax-free bonus on a weekly basis and just did our taxes the other day. Guess what, we're still getting back 3200 bucks from the feds. Last year we got back about $2800."
i get back only $200-$500 per year but then i don't like to give the feds a $3200 a year free load. i can use the $60 a week better.

"Per diem can work for or against you depending upon your circumstances. It is not a total rip-off any way you look at it, but it could be. One thing is for sure, it will benefit the company you work for, but it may or may not benefit you. If you are looking for whether it will work for you or not I can almost guarantee you will not find the answer here. Do your homework, call a CPA or someone familar with your specific situation and find the answer for yourself."
this is so very true, what works will for one doesn't work for all

check then check again then check some more then next year check again and see if it is still working the way it needs to for YOU.

but that's just MO