Here Is What I Am Thinking To Do About Per Diem, Income Taxes And A CPA As A Driver.

It seems from what I have been reading on these forums late that the controversial per diem is not that good an option to take if a driver can opt out of it at a company. Simplifying tax prep is not always in one's best economic interest.

I think it would be just worthwhile to opt out of PD and hire a competent CPA at tax times. I am no tax accountant myself.

As a driver I would save every last receipt (for everything I spend out of pocket that is job related or I THINK is job-related) for any possible itemized deductions to hand over to my CPA in a brown paper bag annually. A good CPA should apply whatever is lawful and applicable to the return to minimize my tax liability as much as possible.

-meals/tips at restaurants
-unprepared food on the job
-water
-telephone
-utilities including WiFi
-clothes
-shoes/boots
-showers
-lodging
-tools
-computers
-bedding used on the job
-appliances as food coolers, etc.
-pens/notepads
-transportation as bus fare (if needed)
-security dog/service animal related expenses as food, vet bills, leashes, collars, etc.
-sunglasses
-hats

I understand the fuel and lumpers are always paid for by the company.

Don't I have to pay for lumpers out of pocket to have the firm reimburse me later?

Should I still save any lumper receipts for the CPA?

For lumpers, my company pays for them in full with EFS checks so I personally never had to use my own money, but IMO, as long as you get reimbursed in full and it's not taxed at the end of the pay week, I wouldn't worry about it. As for the per diem , I personally enjoying having the extra money now and don't mind getting less back with the tax refund, but that's just how I see it. As for the CPA, if you were an IC and had a lot more out of pocket business expenses other than buying the tools you need for every day use, I don't see it being worth it. Just keep the receipts you use and, when filing taxes when asked about business expenses (I don't believe food/drink is seen as a business expense, but a living expense), add the amounts up. I don't see a CPA being worth it to a company driver. But what I say with a grain of salt, I'm only 6mo experienced so far.

Your food and drink expenses are covered by the allowed per diem when you file your taxes. This year, the amount was $63 per day I believe.

My company offers per diem , but it's not a requirement and there is no admin fee. They take a flat 13cpm and deduct that, before they calculate your withholding then add those $ back in.

Tax time was simple for me. I didn't have to keep up with a million receipts and simply had to tell my tax guy how many days I was away from home (kept track from my elogs which I have emailed to me periodically) then he figured the deduction based on that. Yes this year it was $63/day and I don't spend near that much so it was a definite win for me.

Your food and drink expenses are covered by the allowed per diem when you file your taxes. This year, the amount was $63 per day I believe.

Unless a driver ops OUT of PD if that is even an option.

For lumpers, my company pays for them in full with EFS checks so I personally never had to use my own money, but IMO, as long as you get reimbursed in full and it's not taxed at the end of the pay week, I wouldn't worry about it. As for the per diem , I personally enjoying having the extra money now and don't mind getting less back with the tax refund, but that's just how I see it. As for the CPA, if you were an IC and had a lot more out of pocket business expenses other than buying the tools you need for every day use, I don't see it being worth it. Just keep the receipts you use and, when filing taxes when asked about business expenses (I don't believe food/drink is seen as a business expense, but a living expense), add the amounts up. I don't see a CPA being worth it to a company driver. But what I say with a grain of salt, I'm only 6mo experienced so far.

So, if I were to opt out of PD, I would NOT be able to write off on-the-job restaurant meal costs on my tax returns?

No offense..but ...There are tons of questions and issues with trucking. Its a complete lifestyle overhaul that most cannot handle. Only about a quarter of those who go to orientation get into training and of those who get the CDL , only half make it a full year. Think about that. 100 per week are brought into my company. About 25 get the permit and take the test. About 17 pass and get the CDL. Out of those, 13 might make it through training. So 6 will make it a year.

I'm not trying to discourage you, but you seem to be analyzing every trucking aspect except how to drive and what the life is really like. Have you been working the High Road to prepare for the permit exam? Are you watching pre trip videos? People think going to the companies will give you time to learn, but not at mine. I took the permit exam the second day at orientation. It was my job to learn. And knowing pre trip before I got there put me way way ahead. This is a tough gig for some. I love it cause I love not being micromanaged. It just seems that new people who concentrate on aspect other than driving and training are amongst the ones who come back later with stories of "I got fired for a couple accidents cause my head wasn't focused on the driving and learning."

Your enthusiasm is awesome. And I seriously want you to do well. But be sure to do the High Road and prepare for school and the more immediate future...cause next years tax man is far away.

High Road Training Program

Unless a driver ops OUT of PD if that is even an option.

You CAN TAKE THE DEDUCTION ON YOUR TAX RETURN - even if you "op out" of PD (if it is not mandatory at the company you work for)

So, if I were to opt out of PD, I would NOT be able to write off on-the-job restaurant meal costs on my tax returns?

YES YOU CAN - at the STANDARD RATE.

With the assistance of Taxman - here's what we figured out regarding PD.

As a "Transportation Worker" - the IRS has a "Standard Per Diem Deduction For Transportation Workers".

This deduction can ONLY BE TAKEN if you ITEMIZE. It is $63 per day - but the ACTUAL DEDUCTION is 80% of that $63 per day (or $50.40). You DO NOT KEEP MEAL RECEIPTS - you take the STANDARD TW DEDUCTION.

If you are getting paid PER DIEM - that PD payment is 100% Tax Free. You would calculate the $63 per day X how many days you were out. SUBTRACT the TOTAL AMOUNT OF PD PAYMENTS, then 80% of the REMAINDER (the $63 per day MINUS PD payments) would be your deduction.

The ADVANCE PD PAYMENTS are already taken out of your GROSS W-2 WAGES (deducted). This amount is UNTAXED @ $100%, the $63 per day is untaxed @ 80%.

YOU MUST HAVE A VERIFIABLE HOME to take the PD DEDUCTION on your taxes. You DO NOT NEED A HOME to get PD Pay - only to ITEMIZE and get the rest of the PD deduction that is not ALREADY COVERED in PD payments from your company.

You DO NEED to keep receipts for any other legitimate deductible expenses.

Rick

You guys, please stop abbreviating it as "PD" or none of this will ever show up when people search for "per diem" in the search box.

And at this point this subject has been twisted and beaten and confused to death. It's really very simple. You either pay more in taxes each week and get a big return at the end of the year, or you pay less in taxes each week and get less back at the end of the year. That's it. In the end, the difference in net income, if there is any, is negligible.

Everyone is way overanalyzing this simple and relatively unimportant topic. There are far bigger fish to fry.

I would much rather see people analyzing ways to make more money on the road. I couldn't begin to count how many times over the years I was able to make several hundred dollars more per week than many of my peers because I learned all the tricks for maximizing my time management skills, I learned how to make sure I was given the maximum number of miles I could run each week, and I learned how to push my schedule forward with faster loading times and early pickups and deliveries.

If you're not turning 12,000+ miles per month then you're wasting your time worrying about per diem or 401k or any of that because you're losing far more money being unproductive than you could ever dream of saving going OCD on your taxes and retirement strategies.

Spend your time learning how to maximize your pay. Optimize your time management skills. Nurture better relationships with important people at your company. Squeeze every possible minute of time out of your logbook. Ask your company about better opportunities within special divisions reserved only for experienced, proven drivers. And of course never be late with any appointment times.

A top tier driver will turn about 12,000 miles per month. A really good driver will turn 11,000. At 45 cpm that's a difference of $5,400 dollars per year. I know for a fact I was making $10,000 per year more than many drivers with the same experience level and same pay rate because I simply out-hustled them, I was more savvy in my time management skills, and I had better relationships with important people at my company. Same experience, same pay rate, very different results.

No offense..but ...There are tons of questions and issues with trucking. Its a complete lifestyle overhaul that most cannot handle. Only about a quarter of those who go to orientation get into training and of those who get the CDL , only half make it a full year. Think about that. 100 per week are brought into my company. About 25 get the permit and take the test. About 17 pass and get the CDL. Out of those, 13 might make it through training. So 6 will make it a year.

I'm not trying to discourage you, but you seem to be analyzing every trucking aspect except how to drive and what the life is really like. Have you been working the High Road to prepare for the permit exam? Are you watching pre trip videos? People think going to the companies will give you time to learn, but not at mine. I took the permit exam the second day at orientation. It was my job to learn. And knowing pre trip before I got there put me way way ahead. This is a tough gig for some. I love it cause I love not being micromanaged. It just seems that new people who concentrate on aspect other than driving and training are amongst the ones who come back later with stories of "I got fired for a couple accidents cause my head wasn't focused on the driving and learning."

Your enthusiasm is awesome. And I seriously want you to do well. But be sure to do the High Road and prepare for school and the more immediate future...cause next years tax man is far away.

High Road Training Program

I am more obsessed with MONEY right now. Lincoln said a penny saved is a penny earned. The strategy I have is to minimize my tax liability. Perhaps, a financial adviser or CPA can best advise me as to whether take per diem or not. Any trained monkey can learn to drive a truck. Not many are clever enough to PRUDENTLY manage the finances of this business well without professional guidance. Successful truckers have to be successful businessmen I feel.

I don't want want Uncle Sam to pick my pockets any more than acts of Congress say he can.

My basic attitude when approaching any career or business prospect is "I" and "me" first.