Tax Deduction Worksheets Etc. For Trucking

Ok, so question:

How does it work if you get your per diem as part of your cpm?

For example, I get $0.15cpm of my pay as per diem. Now I understand that per diem is limited to $59 per day or something like that, so how does that apply to me? $59 at $0.15cpm would take 393 miles to achieve. Obviously some days I make more and some days I make less than that.

And then how does the "days away from home" factor in? Do I have to go back through all my logs and figure out how many days I was on the road, and then only claim some percentage of all the per diem pay I've received as "actual" per diem?

And could I still deduct other expenses like tools, boots, etc.? Or is that all part of my per diem?

So confusing...

Ok, so question:

How does it work if you get your per diem as part of your cpm?

For example, I get $0.15cpm of my pay as per diem. Now I understand that per diem is limited to $59 per day or something like that, so how does that apply to me? $59 at $0.15cpm would take 393 miles to achieve. Obviously some days I make more and some days I make less than that.

And then how does the "days away from home" factor in? Do I have to go back through all my logs and figure out how many days I was on the road, and then only claim some percentage of all the per diem pay I've received as "actual" per diem?

And could I still deduct other expenses like tools, boots, etc.? Or is that all part of my per diem?

So confusing...

How it "balances out" is like this.

Doesn't really matter whether a portion of your CPM is paid as per diem. You're not trying to drive enough, in order to "earn" your per diem on a daily basis.

If you're getting the miles - then 5-600 miles per day (that you would typically run in a 10 hour drive time) is more than enough to offset the per diem pay. Where it becomes more advantageous, is when you are NOT getting CPM pay, as the daily per diem deduction applies whenever you are not at home - even if you aren't rolling (and earning). So even if you don't make your "per diem target" on a daily basis - the deduction STILL APPLIES.

This means the per diem deduction, will offset EVEN MORE of your taxable income.

So - for example - you're out 300 days at $59 per day. That's $17.7K of per diem deduction. But say your only get $10K in "per diem pay" from your company. You still get the $17K deduction - which means that $7K of your TAXABLE INCOME (that which is paid on your W-2 as taxable, versus per diem, which is non-taxable), becomes non-taxable income ALSO. Which lowers your ADJUSTED GROSS INCOME - and the amount of TAX YOU WILL PAY on your income in total.

Per Diem is not about HOW FAR you drive - but HOW LONG you are not at home.

Rick

As far as "days away from home" goes - you can deduct the daily per diem rate, for every day you are away (but not "partial days").

As illustrated above - if you have 300 days at $59 (17K), but your W-2 only shows $10K in "per diem pay", you still get to deduct the entire $17K.

Conversely - if your per diem pay (non-taxable) on your W-2, EXCEEDS the amount of the calculated deduction for days out, then the balance of that income WOULD BE TAXABLE.

This would rarely (never) happen with a cpm type per diem - also keeping in mind, you will get to claim the day for layovers, breakdowns and resets. If the employer pays by day (versus percentage of cpm) it wouldn't jam you up either - as they know when you are out (versus home).

It's important to keep track of this - as much to not OVER-CLAIM, as UNDER-CLAIM.

Rick

We can claim our meals if we are on the road?

We can claim our meals if we are on the road?

That's one of the mysteries of per diem . Yes you can claim meals & travel-living expenses. Some companies will help you out by paying you a lesser amount, but it's tax free.

The people with tax experience should be here shortly.

We can claim our meals if we are on the road?

There's a couple of ways to do this.

If you take the PER DIEM DEDUCTION - then your meals are included in that.

Other items you can deduct (as elaborated in an earlier post) are not included in per diem (non-reimbursed expenses on the road), and can be itemized and deducted separately.

Or you can skip the per diem altogether, and just itemize everything. THIS is probably going to be more difficult - as you will have to hold onto EVERY MEAL RECEIPT - in case you get audited.

Probably be a lot easier to take the standard PER DIEM - and skip itemizing the meals as this would probably net you more tax savings (unless you're spending more than 50 a day on meals) - and the only thing you have to prove (versus every meal receipt) is days OTR.

Keep in mind - companies that like to pay on a per diem basis, are not doing it to do YOU a favor (per se') but THEM - as they have to pay the other 1/2 of the ss/med withholding on all W2 income (versus not having to pay it on the per diem portion of your pay).

Rick