Trucker per diem ?

[TaxmannEA]

We have a truck driver who drives a local route and is home every night. Her employer has started paying a "per diem" which is figured as $0.15 per mile in addition to her regular hourly wages. There is no FICA or income tax withholding taken on this, but it is included in her regular paycheck. The per diem is not shown on the W-2 as wages. I feel that this should be reported as income subject to SE tax since there is no deductable expense that is being reimbursed.( Probably this is another attempt by a trucking company to reduce payroll taxes.) I need feedback in case there is anything that I have missed.

[mcb39]

If they can itemize, I would put it on the 2106 taking an allowance of 56.5 cents per mile as an expense and then deduct the 15 cents per mile as reimbursed mileage.

[David1980]

If they can itemize, I would put it on the 2106 taking an allowance of 56.5 cents per mile as an expense and then deduct the 15 cents per mile as reimbursed mileage.

Assuming they actually have any vehicle expenses? If the company they work for owns the truck and pays for all fuel and expenses it doesn't seem like the taxpayer could deduct 56.5 cents per mile. If the employee has to provide their own vehicle and is responsible for vehicle expenses then it might make sense to treat the 15 cents as a reimbursement and deduct the standard mileage rate.

[kcjenkins]

We have a truck driver who drives a local route and is home every night. Her employer has started paying a "per diem" which is figured as $0.15 per mile in addition to her regular hourly wages. There is no FICA or income tax withholding taken on this, but it is included in her regular paycheck. The per diem is not shown on the W-2 as wages. I feel that this should be reported as income subject to SE tax since there is no deductable expense that is being reimbursed.( Probably this is another attempt by a trucking company to reduce payroll taxes.) I need feedback in case there is anything that I have missed.

The employer clearly misunderstood the rules on paying a "per diem" to their drivers. It's a win-win to long-haul drivers and their employers, but does not apply to local drivers, unless the driver supplies the truck.

[TaxmannEA]

The truck is company owned. The driver hauls one load per day to a destination about 3 hours away. Driver does not pay for fuel, repairs, or any other expenses. She gets her hourly pay plus the 15 cent per mile payment. Only the hourly pay is shown on her W-2. DOT rules of service don't apply as there is no rest period required. I look at the payment as part of her taxable compensation, but evidently the employer doesn't. We just want to make sure that she doesn't get CP'ed later on.

[Jack from Ohio]

The truck is company owned. The driver hauls one load per day to a destination about 3 hours away. Driver does not pay for fuel, repairs, or any other expenses. She gets her hourly pay plus the 15 cent per mile payment. Only the hourly pay is shown on her W-2. DOT rules of service don't apply as there is no rest period required. I look at the payment as part of her taxable compensation, but evidently the employer doesn't. We just want to make sure that she doesn't get CP'ed later on.

The mileage payment is taxable income whether the employer reports it or not. Line 21 and add SE.

[mcb39]

So, the smoke clears. She has not deduction since the company owns the truck and pays all of the expenses. I would also put it on Line 21, but without SE. I would call it a bonus or a stipend.

[Lion EA]

Well it's really part of her compensation, for services rendered, wouldn't have receive it it she wasn't an employee, etc., so SE.

[TaxmannEA]

Thanks for the confirmation. I just wanted to make sure that there wasn't some new rule that I was unaware of.

[DANRVAN]

It really goes on line 7 and the client needs to be aware of that. Of course the client needs to be aware of the potential consequences of taking action against her employer. But on the other hand, it might be a book keeping error and the owner and or management not aware it. The client needs to know the dollar amount she is losing on this deal.

[Jack from Ohio]

And subject to SE as well. Just as Lion said.

[DANRVAN]

And subject to SE as well. Just as Lion said.

Yes, that is where she loses out on the deal, paying more than her share of tax.