another per diem question

mdscott · Mar 9, 2009

Does the dedoction you take for per diem affect the amount of social security you have to pay if you receive a 1099? Is there any difference in deductions that you get from per diem between receiving a w2form or a 1099? Thx for any help.

Fkatz · Mar 10, 2009

another per diem question

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Does the dedoction you take for per diem affect the amount of social security you have to pay if you receive a 1099? Is there any difference in deductions that you get from per diem between receiving a w2form or a 1099? Thx for any help.

If YOU RECEIVE A 1099 the per diem helps offset the amount of SS that you would have to pay only if you make a profit from your self employment. If you make no profit no SS Tax is figured.

As Far A recieving a W2, it does not have anything to do with you SS TAX due to the fact it is already taken out of your weekly pay and shows in box 4 of your W2 on the gorss income that you made.

dancorn · Apr 2, 2009

I am 62 and just started receiving Social Security last October. I just got my Class A CDL and want to drive part time. I am allowed to earn up to $14k per year without reducing my S.S. I called S.S. to ask if the trucker's per diem was counted as earned income by them. They told me if it was reported by the IRS as earned income then it could reduce my SS income. SS suggested I call IRS to learn if trucker per diem was earned income.
I then called IRS and after being routed to four different people I was told it was not counted as earned income. They did not seem too sure of their answer and therefore neither am I.

So I am asking you.

If during 2009 I work away from my home location and receive a total of $20,000 in pay for 140 days of driving, my per diem allowance would be $5624 (140days X $52 X 80%). Would my earned income be viewed by Social Security as the gross of $20,000 or the lesser amount of $14,176 ($20,000 - $5624).

I hope I have explained this well enough.
Thank you for your time,

MentalGiant · Apr 2, 2009

My understanding of the per diem, is this. Per diem is a deduction. Its supposely money you have spent already, doesn't matter if you didn't spend the max or not and you get to take it out of your taxes as a deduction. It can not be considered as a income, because its a business expense, not profit you made by hauling anything. But, if you want to be anal about it, from the understanding that I gathered. If you spend more than $41.60 a day on food, drinks and snacks, you can keep all your receipts and itemize and claim the full $52 a day if you spend that much. They do the 80% for the ones who doesn't want to keep up with all those receipts to make it easier. And most people don't. Don't quote me on this, but this is what I was told by a professional accountant who does taxes for truckers.

dancorn · Apr 2, 2009

So MG you are saying the $14,176 in my example would be my income?

nightcreacher · Apr 5, 2009

if your getting a 1099,you subtract the per deim from your total wages,and thats what you base your taxes on

Yesteryear · Apr 8, 2009

dancorn said:
I am 62 and just started receiving Social Security last October. I just got my Class A CDL and want to drive part time. I am allowed to earn up to $14k per year without reducing my S.S. I called S.S. to ask if the trucker's per diem was counted as earned income by them. They told me if it was reported by the IRS as earned income then it could reduce my SS income. SS suggested I call IRS to learn if trucker per diem was earned income.
I then called IRS and after being routed to four different people I was told it was not counted as earned income. They did not seem too sure of their answer and therefore neither am I.

So I am asking you.

If during 2009 I work away from my home location and receive a total of $20,000 in pay for 140 days of driving, my per diem allowance would be $5624 (140days X $52 X 80%). Would my earned income be viewed by Social Security as the gross of $20,000 or the lesser amount of $14,176 ($20,000 - $5624).

I hope I have explained this well enough.
Thank you for your time,

Your gross would be the lessor amount of $14,176. But don't forget to deduct for other expenses as well, for instances, office supplies (pens, paper, pencils, maps, ect), items used in the truck (do you keep paper towels, toilet paper, paper plates, ect in your truck, they are deductible as an expense) Entertainment (books, magazines, newspapers, dvds ect) Do you use a cell phone in your truck, it is deductible, computer, wifi/internet, did you pay for any showers, did you pay for truck washes or wheel shining, what about laundry, it is deductible, laundry supplies, throw rugs for the truck, linens for the bunk, all are deductible. Anything you spend money on for that is used in your truck is a deductible. Atm fees and bank fees are deductible as well. All of these (and more) reduce that lessor amount. Example: you spend another 4320 on the items listed above, that amount brings the $14,176 down to $9856.00 so the bottom amount SS would be looking at is the 9856.00. Your SS gross is the total amount made after expenses but before taxes.