Filing My Own Taxes As A Company Driver

Topic 17939 | Page 2

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Rick S.'s Comment
member avatar

How would that work if I opted out of receiving per diem on my checks every week? Would I be able to claim it all at the end of the year and get back a good check?

There are a number of discussions here, with regards to Per Diem.

You can and should take the DEDUCTION ON YOUR TAX RETURNS - even if you do not get any portion of your payment in the form of per diem.

If you do not receive a portion of your pay in the form of per diem, you will receive a nice refund.

If you DO get part of your payment in the form of per diem, you pretty much HAVE TO TAKE the per diem deduction, to make up for the UNTAXED INCOME RECEIVED IN THE FORM OF PER DIEM.

Rick

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

dirtrocker's Comment
member avatar

Thank you Rick. I claim 0 on on my withholdings and then I claim myself, and my daughter and fiance at the end of the year. I do not receive any per diem during the course of the year. So I should be expecting a very nice check.

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

Diver Driver's Comment
member avatar

Don't forget, ANYTHING YOU NEED FOR THE JOB IS A WRITE OFF! Load locks, chains, padlocks, stationary, work boots, work clothes, toiletries.....

I've personally heard nothing but horror stories about Prime's accounting service.

My advice to the O.P. is, get a C.P.A. you'll pay more than turbo tax, but his/her fees are also deductable.

Kat's Comment
member avatar

How would that work if I opted out of receiving per diem on my checks every week? Would I be able to claim it all at the end of the year and get back a good check?

Yes...but you still claim it on your taxes even if the company takes it out. IRS could allow more but still is listed on tax return regardless.

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

Reaper's Comment
member avatar

Actually with this years tax returns i am gonna have to do them on the road lol. They dont ship our w2 out till early feb.

Rick S.'s Comment
member avatar
Yes...but you still claim it on your taxes even if the company takes it out. IRS could allow more but still is listed on tax return regardless.

What folks have a difficult time understanding is that there are TWO ISSUES INVOLVED in the "Per Diem Pay Equation".

#1 - Per Diem PAY. This is where a company pays a PORTION OF YOUR CPM PAY as Per Diem. They don't pay MORE than your CPM, and in fact, many companies keep a processing/admin "fee" of .5-1.5 CPM. Which is actually STEALING in my book, since all payroll software calculates this automatically - keeping ANY of your pay for simply checking a box in your payroll profile is STEALING. Especially since THE COMPANY SAVES MONEY by paying you a portion of pay in the form of Per Diem, because they do not pay MATCHING TAX $$ for SS/Medicare for that portion of your check

Per Diem PAY is not FREE MONEY. It is not $$ IN ADDITION TO whatever your CPM rate is. It is UNTAXED PAY. You STILL HAVE TO PAY TAXES ON IT - unless you DEDUCT IT LATER ON YOUR TAX RETURN.

A - Your NET PAYCHECK will be slightly higher with Per Diem Pay, because TAXES (withholding/SS/medicare) are not deducted for that portion of your pay.

B - Your GROSS TAXABLE PAY will be LOWER - because the Per Diem portion of your check is not included in that number - which can present a problem for folks looking to get a loan or mortgage/etc. - since that is the number you document on your application.

C - Your SS/Medicare contributions will be much less - because that portion of your pay doesn't have it paid in - either by the company OR by the employee (which amounts to 15% total - you pay 7.5 and the company matches 7.5 - this is where the company REALLY SAVES $$ by offering/forcing drivers to take Per Diem pay). Now this isn't going to matter to younger folks, and folks who believe SS isn't going to be there for much longer (and it may or may not be) - but for us older folks that are counting on it to be - your SS payout is dependant on your LAST 40 QUARTERS (10 years) of contributions. If you're paying in based on $40-60K of annual income, you "should" be able to "max out" your SS ($2,250 a month currently, I believe). If your SS pay IN is significantly LESS (by using Per Diem) so will your SS checks at retirement. Especially for us "older folks" where driving is how we are going to end our working careers.

#2 - Per Diem DEDUCTION. This is a deduction taken on your 1040 yearly tax return. Everybody can take a "standard deduction" on their taxes - it varies from year to year - but for a single filer, this year, it is $6,300. For "transportation workers" you can take a "daily per diem deduction" for meals/lodging, for EVERY FULL DAY you spend on the road. You SHOULD TAKE the Per Diem Deduction, as well as deduct EVERY NON-REIMBURSED EXPENSE you can prove (receipts).

A - You MUST ITEMIZE (not take the "standard deduction") to take the Per Diem Deduction. If you have been out full time for the year - the Per Diem Deduction will be MORE THAN DOUBLE the "standard deduction" (roughly $15K+). Deductions REDUCE THE TAXABLE INCOME - that is - the amount of income you pay taxes on. In an earlier post (for someone that wasn't getting paid in per diem, but took the deduction) - with just "rough numbers" - there was a difference of over $3K in taxes you would either NOT HAVE TO PAY - or GET BACK IN A REFUND.

B - YOU DO NOT HAVE TO GET PER DIEM PAY - in order to TAKE THE PER DIEM DEDUCTION. They are TWO SEPARATE THINGS. But if you DO GET PER DIEM PAY - you pretty much MUST TAKE THE DEDUCTION to avoid possibly OWING TAXES over and above what was already withheld - for that portion of your paycheck that was UNTAXED INCOME. Again - Per Diem PAY is not "FREE NON-TAXABLE MONEY" - it is UNTAXED INCOME. The way you make the TAX LIABILITY on that money "go away" - is by taking the Per Diem DEDUCTION on your tax return.

C - You must have A HOME (or at least one on paper that is not a P.O. Box or UPS Store - the IRS kinda has these figured out) to take this deduction - the deduction is for PEOPLE THAT HAVE A HOME but must go away from it to work - like, say, an OTR Trucker. So HAVE A HOME (even if it's just a friend/relative that will receive mail for you, and say that you live there).

D - You must keep COPIES OF YOUR LOGS - to document FULL DAYS OUT OTR. The day you ARRIVE/LEAVE HOME TIME does not count as a full day. Some folks try to combine these non-full days, most just leave them off to uncomplicate things. Even if you take your 1 day for every week out - that's 44 days home a year - and 321 days out. Get and store copies of your E-Logs and/or pay stubs (if your stubs show days out) in case you are ever audited. Have to keep them for 7+ years. I have multiple "cloud accounts" (iCloud, Google Drive, OneDrive) that I store "important documents" on - in multiple accounts. Computer Hard Drives can FAIL, hard copies can GET LOST - keeping scans/photos of documents on multiple cloud accounts means you will have them in more than one place.

Hope this clarifies Per Diem for everyone...

Rick

OTR:

Over The Road

OTR driving normally means you'll be hauling freight to various customers throughout your company's hauling region. It often entails being gone from home for two to three weeks at a time.

Dm:

Dispatcher, Fleet Manager, Driver Manager

The primary person a driver communicates with at his/her company. A dispatcher can play many roles, depending on the company's structure. Dispatchers may assign freight, file requests for home time, relay messages between the driver and management, inform customer service of any delays, change appointment times, and report information to the load planners.

CPM:

Cents Per Mile

Drivers are often paid by the mile and it's given in cents per mile, or cpm.

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

OWI:

Operating While Intoxicated

Aaron M.'s Comment
member avatar

Don't forget, ANYTHING YOU NEED FOR THE JOB IS A WRITE OFF! Load locks, chains, padlocks, stationary, work boots, work clothes, toiletries.....

I've personally heard nothing but horror stories annoy Prime's accounting service.

My advice to the O.P. is, get a C.P.A. you'll pay more than turbo tax, but his/her fees are also deductable.

I live in Chicago, is there a way I can find a reputable c.p.a. in my area?

EPU:

Electric Auxiliary Power Units

Electric APUs have started gaining acceptance. These electric APUs use battery packs instead of the diesel engine on traditional APUs as a source of power. The APU's battery pack is charged when the truck is in motion. When the truck is idle, the stored energy in the battery pack is then used to power an air conditioner, heater, and other devices

Aaron M.'s Comment
member avatar

As Rick mentioned before I probably won't be able to collect per diem since I started last year in September. I think my gross pay was about $6000. I did have many other temp jobs before I got into trucking but those were regular 9-5 jobs. I guess I can use Turbo Tax for last year and come this year I can use a C.P.A.

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Rick S.'s Comment
member avatar

As Rick mentioned before I probably won't be able to collect per diem since I started last year in September. I think my gross pay was about $6000. I did have many other temp jobs before I got into trucking but those were regular 9-5 jobs. I guess I can use Turbo Tax for last year and come this year I can use a C.P.A.

Like Reaper - you have a whole year to figure it out for 2017 taxes.

I use quickbooks for my IT business, and personal accounts. I run everything through my business account, and let my accountant figure it out.

A checkbook program, should allow you to mark purchases as tax deductible. Or you can just keep a spreadsheet to track receipts from non-reimbursed trucking expenses.

Rick

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Errol V.'s Comment
member avatar

Aaron asks:

I live in Chicago, is there a way I can find a reputable c.p.a. in my area?

CPA is a professional label, like Doctor or Lawyer. CPAs have a huge multi-day exam. So any "CPA" should be "reputable". Look for one that has trucker accounts.

EPU:

Electric Auxiliary Power Units

Electric APUs have started gaining acceptance. These electric APUs use battery packs instead of the diesel engine on traditional APUs as a source of power. The APU's battery pack is charged when the truck is in motion. When the truck is idle, the stored energy in the battery pack is then used to power an air conditioner, heater, and other devices

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