Originally Posted by Rev.Vassago: Originally Posted by VitoCorleone99: Originally Posted by : The lower loan qualification scores, SSI vs. Roth IRA, the reduced pay rates, and all the rest are a different story. My point is simply that people like to say they save more on taxes by itemizing, even if the pay is the same. They're wrong. The tax on 25 cents is more than the tax on nothing. Always. Without exception. Even if you're exempt from income tax, you pay your payroll tax starting with dollar one. |
Originally Posted by VitoCorleone99: |
Originally Posted by Rev.Vassago: Originally Posted by VitoCorleone99: It goes to line 12 if it's an overpayment and thus no longer part of the qualified plan. That's where the untaxed income issue comes up. If you're getting the $52 for days that you're not away from home, you've got issues. But then, you would likewise have those issues if you deducted the $52 for days that you weren't away from home. |
Originally Posted by VitoCorleone99: Also, most companies don't take into account days in which the driver leaves home or arrives at home. On those days, the driver isn't entitled to the 75% of $52 standard meal allowance deduction, yet his company will likely give him his $52 per diem pay anyway. The other major issue is that the driver is only entitled to the 75% of $52 if he earns enough taxable income to itemize. Since per-diem pay effectively reduces the amount of taxed income, the driver will likely have no choice but to declare the untaxed income on his tax return, or he won't be able to use the standard meal allowance at all. There are serious tax implications involved here, and all it takes is one audit to bring them forth in a very negative way. |
I still thinking it would be nice if I could find a couple hundred drivers-- that
will pay ME $1200.00 a year to give them .10 per mile(UNTAXED) of .10 per mile that I still would have had to paid them anyway(withholding that tax). Now, I've just made $1200.00 a year off their ass, plus now I don't have to hold on hand as much Payroll Tax for a whole quarter until time to Pay it/ file it. Solves some of my cash flow problems. Plus now I have an added deductible business expense--( giving my drivers what was already theirs). My Balance sheet looks a lot better-- with less Payroll Expense. My Unemployment Insurance Expense is less My Workers Comp is Less Now, If I can run these trucks until the warrent is up-- then find a couple suckers to lease it to-- and get it will pay for itself 5 times over-- and best part of all-- they will be taking all the risk of paying for the fuel. Maybe I can get them to accept trip lease payment -- on a 1099 form. |
Originally Posted by headborg: |
Originally Posted by Rev.Vassago: In point of fact, a driver can receive say $40 in per diem pay (100% tax free) and then deduct 75% of the remaining $12. Originally Posted by : Originally Posted by : Originally Posted by : |
Good luck with that thinking. I'm sure the IRS will have a field day with it.
FYI: If you are out for 250 full days on the road, you are entitled to a $9750 standard meal deduction on your taxes. (250 X 52 X 75%). If your company pays you $13,000 in per diem pay (250 X 52), that $13,000 will show up on your W-2 in box 12, Code L – Non-taxable reimbursements for employee business expenses. The issue, however, is that you are only entitled to a $9750 reimbursement. You would be responsible for paying tax on $3250. Don't believe me? Wait until you get an audit. :roll: Originally Posted by VitoCorleone99: If what I'm stating was not the case, then companies would just pay everything as per diem pay, to avoid paying payroll taxes on it. There are, however, limits as to what they can get away with. The fact that they are even paying anything as per diem is entering an extremely shady area of the tax law. Really, they are using a loophole, and are using Code L for something for which it is not intended. The fact still stands - companies should only be allowed to pay $39 per day as per diem (75% of $52), yet they pay $52 per day, and therefore the driver has $13 per day that he is receiving that he needs to pay taxes on. |
Well, you're just posting false information at this point. Publication 463 spells this stuff out in very clear terms, with very clear examples. People get a little confused because the numbers change, but in a nutshell:
(1)Publication 463 applies to everybody. (2)We (transportation workers) can use $52 a day instead of using the $39 in non-listed areas and the alternate prices in expensive localities. (3)We substitute a 75% limit where it says 50% limit. Otherwise, it's all the same. Originally Posted by : Originally Posted by Publication 463: Originally Posted by Publication 463: Originally Posted by Publication 463: Originally Posted by Publication 463: |
Originally Posted by VitoCorleone99: Originally Posted by Publication 463: By your logic, a carrier could pay an employee everything through per diem, and the employee wouldn't be required to report any income. That is just laughable. :roll: Originally Posted by : Originally Posted by Publication 463: Originally Posted by : Originally Posted by : |
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