Someone explain the good and bad about..........

[Big_Dave]

per dieum (sp).

How's it work, what's the benefits, what's the drawbacks, etc.............

I know that when I'm doing the OTR thing with the company I work for, I keep track of the nights spent on the road and am allowed $54.00 per day to be excluded from taxes.

I know that this helps in the 'short term' (weekly paychecks), but it could hurt me at the end of the year.

So, for those of you that know, put on your thinking caps and put the info out for all to see here.

Thanks. :cheers:

[Capt._Chaos]

My accountant advises against "Per Diem" for the same reasons you mentioned.

I drove for a company that had it, and I refused it.

[Uturn2001]

Per diem pay can hurt a driver when it comes to things like vacation pay, workers comp pay, unemployment benefits, loan approvals just to name a few. Many times these things are figured on taxable income (either gross or net) and since per diem is usually considered non taxable income it may not be included.

[Fkatz]

THE PER DIEM IS FOR YOU DRIVERS, AND IT IS A DEDUCTION AGAINST YOUR INCOME THAT YOU MAKE, IT IS NOT $54.00 PER DAY, IT IS $52.00 PER DAY SUBJECT TO 75% WHICH WILL BE THE ACTUAL DEDUCTION.
iT DOES NOT MATTER WEATHER YOU ARE A COMPANY DRIVER OR OWNER OPERATOR. bUT FOR EVERY NIGHT THAT YOU SPEND IN THE TRUCK OR ON THE ROAD, YOU ARE ENTITLED TO IT.

iF YOUR COMPANY PAYS A PER DIEM ALLOWANCE, IT MUST BE STATED SEPARATELY ON YOUR W-2 IN BOX 12, WITH A "L" IN FRONT OF IT. IF IT IS NOT HERE IT IS INCLUDED IN INCOME ON BOX 1
HERE IS THE WAY IT WORKS.

LETS SAY YOU WORK FOR XXXXX COMPANY, YOU ARE OUT 5 DAYS PER WEEK AND HOME ON WEEKENDS.

YOU ARE ENTITLED TO 5 DAYS OF PER DIEM PAY AT 52 PER DAY WHICH WOULD BE $260.00 x 75%. THAT WOULD EQUAL $195.00 PER WEEK AS A DEDUCTION TO YOU ON YOUR TAX RETURN, BUT IT WOULD HAVE TO BE DONE ON FORM 2106 EMPLOYEE BUSINESS EXPENSES.

hERE IS THE WAY THE PER DIEM WORKS

YOU ARE OUT THE 5 DAYS PER WEEK, ALL YEAR 50 X 260 + WOULD BE $13,000 X 75%+ $9750.00 AS A DEDUCTION IF YOU GET NO REIMBURSEMENT AS A PER DIEM MILEAGE PAY


THIS FORM IS FOR COMPANY DRIVERS
ON THE FORM 2106 EMPLOYEE BUSINESS EXPENSE
EXPENSE NOT REIMBURSED FOR.ANY

LINE 1: VEHICLE EXPENSE USING THE STANDARD MILEAGE RATE FOR PERSONAL VEHICLE OR TRUCK

LINE 2, TRANSPOORTATION ( BUS, TRAIN, AIR FARES) TOLLS, THAT DO NOT REQUIRE OVERNIGHT TRAVEL

LINE 3 MOTELS, HOTELS, AIR, WHEN TRAVEL OVERNIGHT

LINE 4 OTHER EXPENSES NOT REIMBURSED

LINE 5B YOU ENTER YOUR PER DIEM FIGURE (FULL AMOUNT) NOT THE 75% FIGURE)

THE TOTAL WILL BE FIGURED ON LINE 6a FOR LINES 1-4
LINE 6B THE PER DIEM AT THE 75% FIGURE

iF YOU ARE REIMBURSED THE FIGURE IN BOX 12 WITH THE "L" SHOWING OF YOUR W-2 IS ENTERED IN LINE 7 B AND IS SUBTRACTED FROM YOUR PER DIEM FIGURE
THEN IS WOULD BE ENTERED ON SCH A ITEMIZED DEDUCTION LINE 20 AND IS SUBJECT TO 2% ON YOUR RETURN.

SO IF ANYONE IS NOT TAKING THE PER DIEM THEY ARE LOSING OUT ON A LARGE DEDUCTION FROM THERE INCOME WHICH WOULD GIVE YOU A LARGER REFUND OR MAKE WHAT YOU WOULD OWE IN TAXES LESS THEN YOU THINK

iF YOU ARE GOING TO BE IN THE AREA OF WILMINGTON, OH ON JULY 28, AND 29, THE EXPEDITER EXPO IS BEING HELD, IN THE ROBERTS CONVENTION CENTER, iNTERSTATE 71, EXIT 50. I WILL BE IN BOOTH
111, THIS IS JUST ABOVE CINNCINATI ON I 71

IF YOU HAVE ANY QUESTION PLEASE DO NOT HESITATE TO ASK, JUST E-MAIL ME AT FKATZ1@AOL.COM


fRANK

[Pipeman]

Where does the other 25% go ???

[Mark-the-Spark]

To subsidize cheap drugs for Canada :harhar:

[Rev.Vassago]

I think Dave was asking about Per Diem pay, which is where the company takes a portion of your mileage pay, and gives it to you tax free, in lieu of taking the deduction at the end of the year.

And boy, those caps are annoying.

[Fkatz]

Author Message
Rev.Vassago Posted: Sun Sep 24, 2006 10:20 pm Post subject:

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I think Dave was asking about Per Diem pay, which is where the company takes a portion of your mileage pay, and gives it to you tax free, in lieu of taking the deduction at the end of the year.

And boy, those caps are annoying.

REV. VASSAGO:

In reference to Dave, This is true only if you take the per diem from the company, if you do not , you still can take the per diem for logged days out,

If you do take the per diem this is only a reimbursement for the mileage driven. and would be deducted as per the explaination in the Caps.
Also you would still use Federal Form 2106 and get the full deduction at the 75% instead of the difference of what was reimbursed to you by the per diem, but it is still a tax deduction.

Sorry for the Caps, I thought that I was doing the right thing by using them, but I see that it really did not help.
Frank

Mark-the-Spark Posted: Sun Sep 24, 2006 9:51 pm Post subject:

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To subsidize cheap drugs for Canada

Mark:
I don't think So

Frank

Pipeman Posted: Sun Sep 24, 2006 9:42 pm Post subject:

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Where does the other 25% go ???

Pipeman:
The 25% does not exist in the IRS mind. This has been the format since the 1960's. It was originally at 80% until 1997 when the IRS passed its new laws and dropped it to 55% for 1998, 1999 and would increase 5% as follows for 2000, 2001 at 60%, 2002 2003 at 65%, 2004, 2005 at 70%, 2006,2007 at 75% and finally for 2008 and beyond would be back to the old rate of 80% Unless the IRS changes it again.
FRank



Uturn2001


Per diem pay can hurt a driver when it comes to things like vacation pay, workers comp pay, unemployment benefits, loan approvals just to name a few. Many times these things are figured on taxable income (either gross or net) and since per diem is usually considered non taxable income it may not be included.

Uturn2001:
Sorry for the long delay in actually answering this post.

I don;t think that you are figuring things proper. most of the items you selected it will not effect, but it will effect a loan appoval. no matter what your income is. if you are applying for a Mortgage Loan, they go by your net figures on you Tax Return no matter what you actually made and they really do not care. you have to remember the per diem is a deduction that no one sees in income. it is a blind item similiar to using the standard mileage deduction for cargo van drivers. who can take it. and it would greatly effect the net figure onyour income. .
Frank

Capt._Chaos Posted: Tue Jul 11, 2006 12:28 am Post subject:

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My accountant advises against "Per Diem" for the same reasons you mentioned.

I drove for a company that had it, and I refused it.

Captain Chaos:
Your Accountant advised you incorrectly. as far a not taking the regular per diem deduction at all. Here is the reason why! You do not have to take the per diem the Company offers you, but you are still entitled to the regular per diem for the days you log out as a reimbursement towards meals The deduction is still yours to take no matter what.
FRank

Big_Dave Posted: Tue Jul 11, 2006 12:01 am Post subject: Someone explain the good and bad about..........

--------------------------------------------------------------------------------

per dieum (sp).

How's it work, what's the benefits, what's the drawbacks, etc.............

I know that when I'm doing the OTR thing with the company I work for, I keep track of the nights spent on the road and am allowed $54.00 per day to be excluded from taxes.

I know that this helps in the 'short term' (weekly paychecks), but it could hurt me at the end of the year.

So, for those of you that know, put on your thinking caps and put the info out for all to see here.

Thanks.

Dave
I am sorry to tell you that you cannot take the full amount as a deduction it must be figured at 75% of $52.00 not $54.00, and if you go into Canada, you get the $58.00 per Day at 75%.
The Per Diem Deduction will help and will not hurt you at all. it definately will reduce your tax owed it any. which really is the best thing in the world when it comes to taxes. When it come to Income Tax you want to pay only what you owe not more. So if you accountant, or tax preparer is telling you you cannot take a deduction, Check it out with me on this site, If I cannot answer you immediately. or if I cannot answer reight away I am investigating it with the IRS. and will get back to you within a week. So E-mail me directly at Fkatz1@aol.com and I will get back to you within 24-48 hours. or Call me at (704) 739-4039

Frank


To All Drivers out there weather it be company or O/O it does make a difference if you do not take all the deductions that you are legally entitled to.
I hope this clears up some of the controvesery of this topic[/color

[color=red]frank

Frank

[Mark-the-Spark]

Mark-the-Spark Posted: Sun Sep 24, 2006 9:51 pm Post subject:

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To subsidize cheap drugs for Canada

Mark:
I don't think So

Frank

Frank, you will have to excuse us adults with juvenile minds... my post was an attempt to insult Pipeman, who usually deserves such things, simply because he is a Canadian and therefore thinks that he is smarter and better than us Yanks :D

As to per-deim offered by carriers to their drivers on a cents-per-mile basis, which is used to offset the base CPM pay, it has been my experience that this is a tax dodge on the part of the carriers -- at the ultimate expense of the driver.

For example, I once worked for a carrier that offered a somewhat paltry rate of pay (30 CPM), but about 8 CPM of that was "per diem". This meant that I was paid 22 CPM on my W-2. The additional 8 CPM was paid as an expense reimbursement, so I did receive the money (tax free), but it never showed up on my W-2 whatosever.

This means that as far as the IRS was concerned, I was being paid 22 CPM. This also meant, for other purposes -- such as soc. sec. contributions, unemployment, workers comp, or a mortgage application -- I was making 22 CPM, which would lower my benefits or 'loanability' quite a bit below what I would have been eligible for had my employer not used the "per diem scam" and actually reported paying me (and paying their taxes on) the 30 CPM I was actually earning.

I realize that this makes little accounting sense, since -- as far as IRS reporting by the employer was concerned -- I could have still claimed the full per-diem exemption with no offset since none of the company per-diem pay was reported to the IRS. However, that was the way the company had it set up.

But even if they had reported it, it would have shown up as an expense reimbursement instead of wages -- reducing the external wage-related benefits already mentioned.

That is what has earned per diem CPM pay a bad name in this industry. Some drivers like the per diem pay 'up front' because they do not know how to file taxes, or do not file taxes, or do not care. However, since unscrupulous employers seem to use it to reduce thier own tax burden, ultimately at the expense of the employee, those 'in the know' avoid it and get thier tax benefit the 'hard way' (by claiming the per diem exemption at tax time) and maintaining the higher reported gross income which can result in other higher benefits should they be needed (again: soc. sec. benefits, unemployment compensation, workers comp, or loan qualifications).

[Pipeman]

To subsidize cheap drugs for Canada :harhar:


Just go to WalMart, they'll supply you at $4.00 a month.