New Per Diem Laws And Affect On Lease Vs Compny

Topic 23642 | Page 1

Page 1 of 5 Next Page Go To Page:
RobMac's Comment
member avatar

Hello everyone. First off thank you for this website. I have been researching going into trucking for several months and this site has been a valuable tool.

I am very close to applying at Prime (possibly Dec for a Jan orienation). I have read the advice against going lease right out of the gate, and planned to get a year or two as a company driver to learn the ropes. However from what I understand with the new tax laws there is no more per diem deductions for company drivers. Will this be a sitation that could force more drivers to lease? Does Prime pay per diem? If so is it separate from milage pay, or included in the milage? I really don’t want to worry about starting and running a company I know nothing about all while learning a new trade. Thoughts?

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

Turtle's Comment
member avatar

Welcome to the forum RobMac, and I'll go ahead and throw an early welcome to Prime.

While waiting for someone more knowledgeable to answer, I'll go ahead and say what I've pieced together on the new per diem laws.

While it's true there is no longer a per diem deduction on your taxes, your standard deduction will be nearly doubled if I remember correctly. So the net result in your income will have no change, or a change slightly in your favor. I'm not the ripest grape in the bunch when it comes to this stuff, but that's how my accountant explained it to me.

Yes Prime still pays per diem of 8 cpm , and it is a separate line item from your mileage pay. It's also listed separately on your W-2

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

Old School's Comment
member avatar

Hello RobMac, and welcome to our forum!

I never recommend leasing a truck or becoming an owner/operator. I'm a long time business owner who doesn't see any difference in the reward factor of owning or leasing the truck over being a good solid company driver. In fact, I have three friends who were doing well as company drivers who started leasing trucks over a year ago now. They all have confided in me that they made a mistake, but they are holding out in the hope they can turn it around. One of them actually compared notes with me, and he was quite surprised at how much better I was doing than him.

Leasing or owning the truck has unexpected risks that pop up at all the wrong times. Why do you think companies like Prime want to lease their trucks as opposed to just putting good company drivers in them? It's a very simple answer. They cut their risks that way. The driver takes on those unexpected interruptions to his cash flow. The measly tax deduction you'll gain from Per Diem pay will not even come close to covering four or five days of down time with your truck.

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.
RobMac's Comment
member avatar

Hello RobMac, and welcome to our forum!

I never recommend leasing a truck or becoming an owner/operator. I'm a long time business owner who doesn't see any difference in the reward factor of owning or leasing the truck over being a good solid company driver. In fact, I have three friends who were doing well as company drivers who started leasing trucks over a year ago now. They all have confided in me that they made a mistake, but they are holding out in the hope they can turn it around. One of them actually compared notes with me, and he was quite surprised at how much better I was doing than him.

Leasing or owning the truck has unexpected risks that pop up at all the wrong times. Why do you think companies like Prime want to lease their trucks as opposed to just putting good company drivers in them? It's a very simple answer. They cut their risks that way. The driver takes on those unexpected interruptions to his cash flow. The measly tax deduction you'll gain from Per Diem pay will not even come close to covering four or five days of down time with your truck.

Thanks Old School. I honestly don’t want to deal with running a business, particularly as a newbie. I’d rather concentrate on learning what I need to be the best driver/employee I can. Could I make more as a L/O? Maybe, maybe not. The risk and headache just don’t seem to be worth it to me. Im not really up the new tax laws and justbwanted to see what others were thinking. If its only a few thousand difference between itemized or standard deductions, then once again I don’t think the hassle and risk outweigh the reward.

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

DAC:

Drive-A-Check Report

A truck drivers DAC report will contain detailed information about their job history of the last 10 years as a CDL driver (as required by the DOT).

It may also contain your criminal history, drug test results, DOT infractions and accident history. The program is strictly voluntary from a company standpoint, but most of the medium-to-large carriers will participate.

Most trucking companies use DAC reports as part of their hiring and background check process. It is extremely important that drivers verify that the information contained in it is correct, and have it fixed if it's not.

HOS:

Hours Of Service

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

Welcome to the forum RobMac, and I'll go ahead and throw an early welcome to Prime.

While waiting for someone more knowledgeable to answer, I'll go ahead and say what I've pieced together on the new per diem laws.

While it's true there is no longer a per diem deduction on your taxes, your standard deduction will be nearly doubled if I remember correctly. So the net result in your income will have no change, or a change slightly in your favor. I'm not the ripest grape in the bunch when it comes to this stuff, but that's how my accountant explained it to me.

Yes Prime still pays per diem of 8 cpm , and it is a separate line item from your mileage pay. It's also listed separately on your W-2

Thanks for the response Turtle.

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

Old School's Comment
member avatar

Hey RobMac, you may appreciate some of the ideas in this article.

Great Truck Drivers Operate Like Business Owners

I've long thought that successful drivers are much like entrepreneurs. It takes much of the same drive, initiative, and motivation to succeed in trucking. I've been very successful at trucking and have never felt the need to be the owner of the truck. It's a very unusual career that rewards those who show initiative and creativity when it comes to getting things accomplished. If you follow through with your stated approach...

I’d rather concentrate on learning what I need to be the best driver/employee I can.

You'll end up making some good money and enjoying the satisfaction of accomplishing something that very few manage. I'll forewarn you that it's a demanding career with long erratic hours, but if you enjoy a good challenge, you may just be up to it.

HOS:

Hours Of Service

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

We are all slaves to Master Freight. Master Freight is a cruel, relentless master who constantly is cracking his whip. LoL!!!

shocked.png

Grumpy Old Man's Comment
member avatar

I was under the impression the per diem for company drivers was just a portion of the amount you are already earning, paid as per diem, to give you (and the company) a tax break. Or am I missing something?

Bear in mind, per diem will not show as income for social security purposes, or when you apply for a loan, etc.

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

andhe78's Comment
member avatar

I was under the impression the per diem for company drivers was just a portion of the amount you are already earning, paid as per diem, to give you (and the company) a tax break. Or am I missing something?

Bear in mind, per diem will not show as income for social security purposes, or when you apply for a loan, etc.

Other companies are different, but for us, every day we are not home, sixty-three dollars of that day’s wage is not taxed.

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

RobMac's Comment
member avatar

Very good article Old School.

I can relate. I have been self employed in the music biz most of my life, and it is all about selling yourself. I have been a performer, concert audio mix engineer, and road manager, with the road manager being the toughest of all. You definitely have to get creative at problem solving, wearing many different hats all while getting no rest to ensure everything goes smooth for the band, promoter and audience. It is also a job you can’t count the hours for your pay. Music is a lifestyle as well. Unfortunately it is not providing enough steady income anymore and the competition for the top paying jobs are insane as there are only a handful throught the country. Not to mention I am tired of playing in bars locally.

I won’t lie this potential adventure into trucking is scary as ***. I have an Uncle who retired from trucking not long ago (who did quite well) and his wife who owns a frieght brokerage, basically said find something else. I’ve always had that kid’s dream of driving a big rig, and I do love adventure and challenge, but the stress takes off years and I don’t have too many remaining (goin on 51 in Feb). However my current situation is about to get very stressful itself (like homeless). This could be a good life reset for me as long as I am able to keep the right attitude and stay on the positive side. I suppose tht is what being grown up is all about, seeing that a bad attitude and negativity means pretty much guaranteed failure. We are all exactly where we are supposed to be in life according to our actions...

Page 1 of 5 Next Page Go To Page:

New Reply:

New! Check out our help videos for a better understanding of our forum features

Bold
Italic
Underline
Quote
Photo
Link
Smiley
Links On TruckingTruth


example: TruckingTruth Homepage



example: https://www.truckingtruth.com
Submit
Cancel
Upload New Photo
Please enter a caption of one sentence or less:

Click on any of the buttons below to insert a link to that section of TruckingTruth:

Getting Started In Trucking High Road Training Program Company-Sponsored Training Programs Apply For Company-Sponsored Training Truck Driver's Career Guide Choosing A School Choosing A Company Truck Driving Schools Truck Driving Jobs Apply For Truck Driving Jobs DOT Physical Drug Testing Items To Pack Pre-Hire Letters CDL Practice Tests Trucking Company Reviews Brett's Book Leasing A Truck Pre-Trip Inspection Learn The Logbook Rules Sleep Apnea
Done
Done

0 characters so far - 5,500 maximum allowed.
Submit Preview

Preview:

Submit
Cancel

Join Us!

We have an awesome set of tools that will help you understand the trucking industry and prepare for a great start to your trucking career. Not only that, but everything we offer here at TruckingTruth is 100% free - no strings attached! Sign up now and get instant access to our member's section:
High Road Training Program Logo
  • The High Road Training Program
  • The High Road Article Series
  • The Friendliest Trucker's Forum Ever!
  • Email Updates When New Articles Are Posted

Apply For Paid CDL Training Through TruckingTruth

Did you know you can fill out one quick form here on TruckingTruth and apply to several companies at once for paid CDL training? Seriously! The application only takes one minute. You will speak with recruiters today. There is no obligation whatsoever. Learn more and apply here:

Apply For Paid CDL Training

About Us

TruckingTruth was founded by Brett Aquila (that's me!), a 15 year truck driving veteran, in January 2007. After 15 years on the road I wanted to help people understand the trucking industry and everything that came with the career and lifestyle of an over the road trucker. We'll help you make the right choices and prepare for a great start to your trucking career.

Read More

Becoming A Truck Driver

Becoming A Truck Driver is a dream we've all pondered at some point in our lives. We've all wondered if the adventure and challenges of life on the open road would suit us better than the ordinary day to day lives we've always known. At TruckingTruth we'll help you decide if trucking is right for you and help you get your career off to a great start.

Learn More