A Year Of Per Diem Pay - The Results

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Ryan R.'s Comment
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It was more that the fact that Errol didn't account for the standard deduction on the side of not getting per diem pay confused me. It seems dishonest to me not to throw that in there when comparing pay after taxes, and then I wondered if I understood the whole situation properly since I'm well aware I am not an expert at truck driver taxes.

The fact page linked to in this thread already What Is Per Diem Pay For Truck Drivers seems to summarize it quite well.

The only issue I have a slight problem with is:

If a driver did not receive per diem pay they would do one of two things at tax time. You either save all receipts for meals and incidental expenses and deduct 80% of those at tax time. Or you would take the IRS "standard deduction" which is currently $59/day.

Correct me if I'm wrong, but it is my understanding that 1. it's currently $63/day 2. It's 80% of $63. That sentence makes it sound like you don't take 80% from the standard deduction.

Another benefit to per diem pay that I don't note it mentioning is that you can invest that money earlier instead of having it tied up until you get your tax return.

Also, can someone explain to me how a company calculates per diem pay?

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.
C T.'s Comment
member avatar

I did my taxes recently and didn't have per diem. Tax guy said in order to take advantage or get the deduction for your expenses, you have to itemize a certain amount. I don't recall the exact amount, somewhere between 8 and 12k I think. I didn't save receipts and all from everything. I got back a very nice amount 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

Rick S.'s Comment
member avatar

I did my taxes recently and didn't have per diem. Tax guy said in order to take advantage or get the deduction for your expenses, you have to itemize a certain amount. I don't recall the exact amount, somewhere between 8 and 12k I think. I didn't save receipts and all from everything. I got back a very nice amount regardless.

This is going to vary, depending on number of dependents.

Married - $12,500 standard deduction.

But still - if you've been out there for a full year (300 days X $50.40 a day = $15,120 deduction), you have still exceeded the "Standard Deduction" figure, so you should still itemize and reduce your "taxable income" by another $2K.

Keep in mind also, there are many ""road related, non-reimbursed expenses", that you can take as deductions.

The object is to REDUCE YOUR TAX LIABILITY AS MUCH AS LEGALLY ALLOWABLE.

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

ChosenOne's Comment
member avatar

I agree you need to reduce your tax liabilities. Every dollar counts, I have used the same Tax Attorney for years to prepare my returns. He says you should not be getting much back at the end of the year, your tax person should be able to tell you what adjustments you need to make to your withholding. As he says, companies hate when you deviate from a standard, S0, M1, but there is not rule that says you cannot make adjustments to your withholding a few times a year, why let the Government have it all year long, change it and get it now. He also said, if you are buying T-Shirts, buy the ones with e company logos, those are tax deductible, same with any piece of clothing, if it has the company log it is deductible. Doing laundry on the road, that is deductible. He said while the IRS loves receipts, laundry mats don't print them, so keep it as detailed as possible, business name, address, etc. He also said if we go to a flat tax, all of this goes away, so get while the getting is good.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
C T.'s Comment
member avatar

Yes I'm married with 2 dependents, wasn't worried about it too much lol I only drove about half the year so I grossed 32k

Ryan R.'s Comment
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C T,

May I ask what company you grossed 32k in a half a year with?

Fatsquatch 's Comment
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One thing needs to be clarified here, before a whole lot of people go and get themselves in a whole lot of trouble. That 80% of $63 per day isn't a set-in-stone figure. That's the maximum allowable deduction, meaning you can deduct up to that amount, provided you can produce receipts verifying that you did indeed spend that much on food and drink during your time on the road. You can't claim more than you actually spent, and you can't claim any food expenses that were on home time. So unless you're spending over $400 a week on food while you're out on the road, you're never going to be able to deduct that maximum amount, and even a Fatty McFatterson like me only spends about $150 a week on food when I'm out. You also can't go grocery shopping for the family and throw that feed bill in with your receipts to try to pad your deductions, unless you're toting the spouse and kiddies around with you.

Rick S.'s Comment
member avatar

One thing needs to be clarified here, before a whole lot of people go and get themselves in a whole lot of trouble. That 80% of $63 per day isn't a set-in-stone figure. That's the maximum allowable deduction, meaning you can deduct up to that amount, provided you can produce receipts verifying that you did indeed spend that much on food and drink during your time on the road. You can't claim more than you actually spent, and you can't claim any food expenses that were on home time. So unless you're spending over $400 a week on food while you're out on the road, you're never going to be able to deduct that maximum amount, and even a Fatty McFatterson like me only spends about $150 a week on food when I'm out. You also can't go grocery shopping for the family and throw that feed bill in with your receipts to try to pad your deductions, unless you're toting the spouse and kiddies around with you.

Actually - that is INCORRECT.

The "Standard Transportation Industry Per Diem deduction" - is based on DAYS OUT. As long as you can PROVE HOW MANY DAYS OUT you were, that's the ONLY THING you need to verify. You don't need receipts for "meals and incidentals", which is what the deduction is there to cover. The reason is - to SIMPLIFY THINGS for the truckers and eliminate the need to KEEP RECEIPTS. All you need is COPIES OF YOUR LOGS to justify - and KEEP THOSE LOGS FOR 7 YEARS, in case you get audited.

This is one of those things (the Per Diem Deduction), where you CAN MAKE OUT TAX-WISE, if you spend less than the $50.40 (80%) a day.

I'm still digging into a couple of other details, but all my accountant/friends are taking a well deserved break after tax day.

You CAN AND SHOULD take this deduction, EVEN IF YOU AREN'T PAID PER DIEM (if doing so, along with other deductible expenses, exceed the "Standard Deduction" amount).

Anything OTHER THAN MEALS, that are "non-reimbursed expenses", can also be deducted - but you DO NEED TO KEEP RECEIPTS for those items.

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.
C T.'s Comment
member avatar

Ryan I'm with Maverick

C T.'s Comment
member avatar

Technically a little over half, got my truck in the middle of May

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