Per Diem Pay For Truck Drivers

Thanks for explaining per diem. Now it makes sense to me.

@Patski

Would maximizing your exemptions help those who want more in their weekly check and less big refund at the end of the year?

Understanding there would be more effort to keep track of as a trade off.

That is the right attitude. The American fascination with a huge tax return is extremely poor financial planning. But it's not only about the big lump versus getting it now. You may be getting less OVERALL. Would you rather have $5,500 extra over 12 months paid each paycheck? Or $7000 extra over those same 12 months but paid in a lump sum at the end? $7,000 is always better than $5,500.

You also can counteract the "lump sum" approach by adjusting your withholding. Again... talk to a professional, it's worth the time. And not just you Daniel, but everyone.

Is there anyone that can show us a real example of the two choices?

Is there someone who can and is willing to show they earned the same amount (as close as possible but no more than a $10,000 annual income difference) for any of 2 years (doesn't have to be consecutive years) with one year showing what they got for per diem through every pay check and their tax return for that year with the other year showing you getting your per diem at the end of the tax year and what that tax return was?

Here is what I got for pay. 46803 for year.

Forced per diem pay was 26680 This was my pay for 1040 tax form.

Now the per diem amount is used for social security in 2 years when I get to 65. So now after making around 44000 the last 3 years I have a big drop in this years SS income.

I believe IRS uses last 3 years to pay out SS benefits so now I have to work harder without per diem lowering my gross pay for year, to get SS benefits back up to higher pay out..

I don't like per diem, but if you're younger person it could be good.

That's all I got. Steppenwolf

I believe IRS uses last 3 years to pay out SS benefits so now I have to work harder without per diem lowering my gross pay for year, to get SS benefits back up to higher pay out..

Steppenwolf

I don't think that's correct. Your Social Security benefits are based on your lifetime contributions. This is from the ssa.gov website "We base Social Security benefits on your lifetime earnings. We adjust or “index” your actual earnings to account for changes in average wages since the year the earnings were received. Then Social Security calculates your average indexed monthly earnings during the 35 years in which you earned the most."

You might be confusing it with certain defined benefit pensions, which often are based on your final 3 years. This is famously the case with government employees, and why police officers nearing retirement get first dibs on overtime, so they can max out the basis of their pensions.

James nailed it!