[sbatson]

Is per diem a good thing or what I see alot of up and down thoughts on this?

[BeauteousRot]

This was my first year of trucking. I did not take perdiem in my checks. It was FAR better for me to take it as an end of year deduction.

By taking an end of year deduction, and keeping only HALF of my purchase receipts, I knocked my taxable income down by half. I recieve half of my paid income taxes back as a refund.

This does not mean its better. You may need more money during the year, I did not. This is only my experience and I'm sure others will post on theirs.

[Twilight Flyer]

Keep in mind that Per Diem affects your taxable income, which in turn effects your long term social security benefits. If you have faith that social security in some form or another is going to be around when you retire, then plan on handing out little yellow smiley face stickers at Wal Mart if you take Per Diem.

Per Diem is really set up to benefit the employer, not the employee. They save plenty of money on company payroll and taxes if you take Per Diem. You get a few extra bucks in your pocket at the expense of possible retirement income from social security.

[Drew10]

I agree with TF he makes a very good point on not taking your perdiem in payroll. The gain in weekly income is small. I just claim the per diem at tax time.
The employer saves on what they pay you, in this case, per mile. The example I looked at assumed aprox .30cpm, taxed.
When employer gave the per diem in payroll it broke down to aprox.
.20cpm taxed
.10cpm (perdiem) untaxed. equaling the original .30cpm pay. aprox 1/3 of your cpm was untaxed (perdiem). This is where you gain in weekly income (marginal). Employer saves the .10cpm as this is your earned per diem.
Anybody have a better way to word it please help out, I think its a big ripoff to take it in your pay.

[coalregion]

If it were to benefit the driver, odds are very good it wouldn't be offered by most companies. :shock:

[VitoCorleone99]

The potential negatives have been discussed here ad nauseam, so I'm sure plenty of people will chime in on those. On the actual money involved though, per diem pay is 100% tax free. Per diem expenses are 75% deductible. If all other factors are equal, per diem pay will always mean more income over the course of a year, compared to the itemized deduction. The catch is that all other factors are almost never equal.

[headborg]

Originally Posted by coalregion

If it were to benefit the driver, odds are very good it wouldn't be offered by most companies. :shock:

LOL....because it hurts too much to cry...

So true, then to add insult to injury you have these companies that CHARGE the driver a .01- .015 cent per mile FEE to process it---can you say

WHAT THE---FUCX! BEND ME OVER--WHY DON'T YOU!


just make 2 columns and look at----WHAT THEY GET & WHAT YOU DON'T GETvsLESS TAX PAID IN

__________________________________________________ __________
I have to play Devil's Advicate here too----

If you owe Uncle Sam a Student Loan or something that can't be gotten settled by Bankruptcy--- and you're getting your WAGES garnished and/or
they are taking your Income Tax Refund anyway-----then yes---more the
per diem better....yes o'lord ....give me Big Per Diem!

[Drew10]

headborg wrote:

So true, then to add insult to injury you have these companies that CHARGE the driver a .01- .015 cent per mile FEE to process it---can you say

Mine company does that :roll: ....Like I said, Id just as soon keep it all and file the deduction at tax time.

Ive heard, some of the companies dont give the driver an option, you must take the per diem in payroll...Dont know how true it is.

[headborg]

Originally Posted by Drew10

headborg wrote:

Mine company does that :roll: ....Like I said, Id just as soon keep it all and file the deduction at tax time.

Ive heard, some of the companies dont give the driver an option, you must take the per diem in payroll...Dont know how true it is.

Yes true...some companies DON'T GIVE YOU a choice---now, How many of them ALSO charge you too???? Anyone, in that boat? Mandatory per deim + getting "charged" for it?

Lets see--- average 10,000 miles per month x 12= 120,000 miles x .o1=$1200 dollars a year to save YOU how much in taxes?

$1,800.00 a year if they are charging 1.5 cents per mile!


Come on man, pay me $1800.00 dollars -- I'll do a little paperwork for you. H&R Block lookout----Knight Transport is gonna put YOU out of business. How much does H&R Block charge to do your taxes?

[Rev.Vassago]

Originally Posted by VitoCorleone99

The potential negatives have been discussed here ad nauseam, so I'm sure plenty of people will chime in on those. On the actual money involved though, per diem pay is 100% tax free. Per diem expenses are 75% deductible. If all other factors are equal, per diem pay will always mean more income over the course of a year, compared to the itemized deduction. The catch is that all other factors are almost never equal.

This is verbatim from a trucking tax professional:

I just got the offical rules on getting over payment on your per diem.

If the companies deduct and pay per diem they must list it in Box 12 of your W-2 with the code "L".

If you should have a problem and have to draw SSI or Workers Comp it is based on the figure in Box 1.

If you want to get a loan that is based on the figure in Box 1 of the W-2

The amount will be added to your gross income and taxed at the rate you have.....THEN that amount will also be taxed as self-employment at the rate of 15.3% and added to your income tax.

I asked the IRS PERSON why they did not go after the company for this. HE SAID....because it is easier to go after the tax payer.....