Can anyone explain to me how that pay works when you get different pay for your truck on the arm and per-diem, what you pay taxes on and what you don't pay taxes on, my tax guy said he hasn't ever heard of this.
The hand pay is what is going to be taxed. The truck and PD should be tax free. I have heard that there is a limit on PD that after that amount it will be taxed. I have also heard that the limit for truck pay is 15/hr anything more and there can be some penalties.
i recently worked as a cwi on a contract basis 36 hr +
110.00 a day per diem and .50 per mile, Finally got around
to doing my taxes today. The company I worked for only
put my wages on the 1099. So am i suppose to add the per diem
and mileage up myself and pay taxes on it? I always thougt
if it wasn't on the 1099 you didn't have to claim it. can anyone
clarify this before i hit the send button to the irs thanks Joe
The PD is not reported on a 1099 as long as it is less than the IRS/GSA listed allowable for the area you worked in. Some areas of the US have a 300 dollar a day allowable and others 125. THe IRS does not consider the per diem as income as long as it is less than the allowable.
BUT if you are sleeping in you bed every night and you are getting a PD check and not claiming it as income, you can wind up in deep kim chi. You have to be working over 90 miles from your permanent residence to claim PD instead of income.
If you were working away from the house, you do not have to claim the PD as income.
If you were working at the house, you are supposed to claim it as income.
thank's i feel much better now. I was about120 from home
Tthe money you make on the arm is taxed but per diem and the rig pay, up to $15, is non-taxable. One thing where you can get into trouble is if they pay $20 an hour for the rig, you have to claim that extra $5 as non-taxed income. I've seen companies pay less on the arm and more on the rig because they can claim the rig rental as an off the top deduction for them which will save them money come tax time. NEVER, NEVER take more than $15 an hour for rig or the IRS will come calling quick if they audit you. As far as per diem goes, the feds have a rate for certain areas that you work in. Your tax man can look these rates up. What I do, if I'm getting per diem that's lower than what the feds allow, I deduct the difference between that and what I get on my taxes. Example: If I'm getting $95 a day and the feds allow $150, I deduct the difference of $55 a day. If you do this, make sure to keep your stubs and such with per diem rates incase the ask any questions and make sure to get you a CPA that knows his stuff. My returns usually cost about $350-450 a year to do, depending on how many states and such I work in.
Thanks fellas it seems like it is more to help the companies making the checks out, not really so much for the welders.
when I use to tow my fishing boat with my old rig i got some work down at the harbor
Saltwater is brutal to steel trailers lol and people who can't back their boats up without
hitting the dock with the trailer is even better. WSe all pay more than our fair share
of taxes with all the OT so a little 10 min job on a fender bracket that helps some one drive home
and buys a little cerveza to go with the fish ain't hurting no one. I don't agree with lowballing
prices to get jobs by charging less for cash you know the guys out there with no insurance ,
no contractors license, no bus license just out to make some money and disappear with no interntion
of reporting any income.I know a couple rig hands collecting Unemployment and making a ton of cash
money off craigs list doing cash jobs 4hr min 50.00 hr
There was a federal supreme court ruling on rig compensation I forget what year but rig compensation under an agreement cannot be taxed as employee income. But you do still file a 1099 on it.
http://www.irs.gov/pub/irs-wd/0127004.pdf
Buy this time next year we will be talking a diff. lang. and paying tax to a diff. country.
You should not get a 1099 on rig pay if the contractor is doing it right. Rig pay at $15/hr or less is a non taxable reimbursment and no 1099.
Same with per diem, if it doesn't exceed the max allowed for the area it's tax free.
The reason lowlife contractors pay excess on the truck and less on the man is because it saves them a ton of money. Your wages cost the contractor a significant amount above your actual pay rate: half of fica, workmans comp, unemployment, etc. Rig pay cost the contractor only the dollar amount of the rig pay plus the clerical expense of cutting the checks and carrying the paperwork.
Big difference that puts money in the bosses pocket and takes it out of the welders.
When they shift wages into rig pay you lose in several ways, unemployment, social security paid in, etc. And if the rig pay is over $15/hr you pay both income taxes and both sides of fica. That's a chunk right there.
JTMcC.
My Vote is for paying Everything 100% Contract and I will file my own taxes. I want everything on a 1099
Cactus, Once again you come up with a solution way to simple. I don't know how many guys I've lost to Halfa##ed contractors ( when times are boomin'). They hire guys as independent contractors ,getting them to buy inadequate /substandard equipment . They turn around and pay them a high rental rate$ 40.00-$55.00 an hr. and low wage $15.00-$20.00, work them long hours( no o/t) when their equipment crapps out they will even supply backup. After the jobs over, ADIOS your done and the best part you get a 1099 for TOTAL amount paid out to you. In every case I've seen, guy is dumbfounded what to do. Ends up in tax trouble for years to follow. Typical attitude let somebody else pay the CPA or taxman, if I can shave a few bucks!!!!!! Then the guy at the end of the line is left holdin' the bag. With your rule guys would go into the BUSINESS with their eyes a little wider open, knowing they are gonna have to deal with" the tax experts" Just my .02 from Pittsburgh the home of the STEELERS and PENS
I feel like, If I get it all then I control it all. If it gets all F^#ked up then it is no ones fault but.......MINE. I would MUCH rather control things that pertain to me rather than depend on someone else
I guess it comes down to if you have a job or run a business. Most welders want a job and let someone else take care of the paperwork. Others want it to be a business and handle the paperwork and headaches for the increased $$.
I'm not so sure About the increased $$$. LOL
I wish i would have known about this. i just finished a 3 month job and the company paid, 15 on the arm, 35 on the truck. so they took taxes out the 15 and i pay on the 35 at the end of the year. so what your saying is-- they do this to save money and f**k me. and the pay should be the other way around. is this right or am i wrong, just checking.
yes, you got it right. You're going to owe more in taxes because the rig pay was higher than $15 an hour. The better deal for you would have been $35/hr 'on the arm', $15/hr 'on the truck'.
thanks, i'll have to remember this. not like they already screw us over, just another way to get more money.
everyone i have worked for take taxes out on the arm, at the end of the year i get a W2 for that. 1099 for equipment rental. i dont pay on the W2 but i pay on the 1099. no matter what you make or who you work for, the IRS knows how much you make, when your paid with a check.
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