Quote:
Originally Posted by Rob_0126
How bout a breakdown of just what exactly per diem means to a driver. I have no idea what you are talking about, except that it's about taxes.
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The new rate is $41/day.
You can deduct 70% of it.
Meaning, if you use long form for taxes you can NOT pay taxes on this amount of income.
Say you are out 300 days in a year.
300x41=12,300 x .70 = 8610.00
Say you are paying 25% tax rate, then you would not have to pay taxes on this 8610 bux, putting an extra 2152 bux in your pocket.
BUT, then you can take standard deduction ala short form. So you have to look at your total income and all possible deductions to see which is better.
As I understand it, though, if you have the company do the per diem, then you can still file the short form yet get the income as non-taxable, but I'm not totally clear on this. Also, you ARE making less per mile overall, too. After all, if you do say just 2,000 miles per week for 50 weeks, that penny = $1,000 less income.
So you have to look at your total options/income.
And talk to a tax person.
Mac