Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: http://read.dmtmag.com/i/818577
VOICES CHANNEL 19 8 | Overdrive | May 2017 Visit Senior Editor Todd Dills' CHANNEL 19 BLOG at OverdriveOnline.com/channel19 Write him at tdills@randallreilly.com. If you're an owner-oper- ator, the federal per-diem deduction for meals for any day away from home is 80 percent of $63, or $50.40. Multiply that by the days away from home annually, and you can see the sub- stantial reduction of your taxable income. But if you're a company driver paid via W2, with some tax withholding, things can get complicated, as a reader emailed: My employer pays me $40 (taxed) per day for meals and miscellaneous. Am I only supposed to claim 80 percent of the $40, or should I still use the $63 amount? Tried looking it up on the IRS site, but of course they garbled it in a book-length treatise. Mike Calahan of ATBS, the company's head tax man, notes the reality that carriers treat per-diem allowances diff erently, as the reader implies. "If the carrier subjects the reimbursement to tax," Calahan notes, "then the driver would be entitled to 80 percent of $63 for a full day away from home." That answers the reader's question, given his tax situation. However, Calahan adds, "if the carrier reimburses for per diem on a pre-tax basis, then the driver would be entitled to a deduction for the diff erence between 80 percent of $63 and the per-diem reimbursement for each full day away from home." In the case of a $40 pre-tax reimbursement, that would mean $50.40 minus the $40, or $10.40 per day. Keep in mind, however, what owner-operator Phil Killerlain noted on my Facebook page about the give-and-take of income tax deductions when it comes to eventual retirement. "What a lot of company drivers do not realize is that in the long run, they are losing money if paid per-diem before tax- es, as the companies get out of paying matching Social Security and Medicare" on the per-diem amount. "When they retire and start drawing Social Security, they have lost around $7.50 per day, income that would have counted toward their SS gross amount, which is the number used to calcu- late your monthly payment" when you begin drawing Social Security. Taking a pre-tax per diem "sounds like a good deal," Killerlain notes, "un- til you look at the conse- quences." Join the per diem discussion via the April 3 and 4 posts on Channel 19. In the per-diem weeds MATS videos about beauty and the beast I spent much of the last day of the Mid-America Trucking Show at the PKY Truck Beauty Championship. Among many familiar faces there was the unfamiliar one of Bill Warner Jr. and his 1987 Peterbilt 359, now a limited-mileage showpiece running in his nine-truck dump-trailer fl eet in West Virginia. It bagged a Best of Show in its class. Read more about the Pete on page 52, and in the March 30 blog post, catch a video with Warner about the rig. Also, in the March 29 entry, listen to a new track from past Trucker Talent Search fi nalist Paul Mar- hoefer. I chanced upon the Moeller Trucking driver at the convention center, where he played me his new "Mama Crys- tal" song, about how methamphetamine has ravaged some drivers. Scan the QRs to pull the videos up on your mo- bile device. Average time away from home on most trips Source: OverdriveOnline.com poll Home every night 19% 1-5 days, home most weekends 33% 6-10 days** 11% Not sure, varies a lot 7% More/I live on the road 13% 11-20 days 17% Weekenders More than half of the respondents to this poll make it home most weekends, though that timeframe can mean different things. Canadian hauler David Sutherland, running most of his miles in the United States, wrote that the "1-5 days, home most weekends" category doesn't exactly cover his situation because he gets home on Friday nights and leaves early Sunday mornings. "Maybe we could add '6-10, home every weekend with a kiss and go.' LOL."