Per Diem as Income?

[stealth2]

My ex was a contractor for the government a while back - and same with him. A hefty regular wage, plus a per diem on top of that - which he would not have received if he lived locally.

The fact that OP is getting paid just over min wage and a hefty per diem so that the company can get qualified workers? Smacks of fraudulent practices. No "qualified" worker of the type he claims to be is going to accept $8/hr. My kid makes more than that working retail p/t.

 

[LdiJ]

My ex was a contractor for the government a while back - and same with him. A hefty regular wage, plus a per diem on top of that - which he would not have received if he lived locally.

The fact that OP is getting paid just over min wage and a hefty per diem so that the company can get qualified workers? Smacks of fraudulent practices. No "qualified" worker of the type he claims to be is going to accept $8/hr. My kid makes more than that working retail p/t.

It doesn't just smack of fraudulent practices, its clear cut fraudulent practices.

Like I said, I am really going to enjoy this one. There are actual "offices" set up during the IRS seminars just to report stuff like this. I have printed out the thread and its going with me.

 

[Proserpina]

It doesn't just smack of fraudulent practices, its clear cut fraudulent practices.

Like I said, I am really going to enjoy this one. There are actual "offices" set up during the IRS seminars just to report stuff like this. I have printed out the thread and its going with me.

*pom pom alert*

Go L!

This ABSOLUTELY needs to be reported.

(And crap, I don't really know about tax stuff - but even I can smell that this dish stinks!)

 

[Splitz]

I have yet to work overtime for this specific employer, but from what I've been told. If you work more than 40 hours, the OT is taxed at $39/hr, and not on base rate.

I haven't necessarily been "arguing" with anybody, my comments were advising to read the IRS circular which discusses per diem. How it relates to child support and in my research, there are 2 states (Louisiana and Florida) that specifically state per diem is not to be used in child support calculations. Texas does not have a specific line item in what it considers as net income. However, what is listed as "net income" are all taxable receivables, and not non-taxable income which per diem falls under. I am not trying to negate my child support requirements, however, the NCP shouldn't be strapped for cash to the point just so baby mamma's can snort coke up their nose and feed their kids ramen noodles and mac'n'cheeze while the CP eats filet mignon and other expensive foods which is another issue all together.

Finding qualified workers to work contact aircraft maintenance/modifications are difficult.

Like I said in a previous post, this is common and has been going on for years. I highly doubt y'all have found a "goldmine" as I'm sure this has already been in the IRS attention and dealt with. This specific company has been around since 1998 and has over 1200 employees across the nation.

And for the record, the per diem that I receive, I spend about 80% of it in the assignment location, isn't like I'm banking all the monies received.

 

[rmdad]

Im new but income is income...per diem or not!!!

 

[Splitz]

Im new but income is income...per diem or not!!!

In the child support guidance in Texas, income is NOT income:

§154.062. Net Resources.
(a) The Court shall calculate net resources for the purpose of determining child
support liability as provided by this section.
(b) Resources include:
(1) 100 percent of all wage and salary income and other compensation for
personal services (including commissions, overtime pay, tips, and bonuses);
(2) interest, dividends, and royalty income;
(3) self-employment income;
(4) net rental income (defined as rent after deduction operating expenses
and mortgage payments, but not including noncash items such as
depreciation); and
(5) all other income actually being received, including severance pay,
retirement benefits, pensions, trust income, annuities, capital gains, social
security benefits, unemployment benefits, disability and workers’
compensation benefits, interest income from notes regardless

Notice, per diem is included in the list of (5). All listed in this section is taxable income which per diem is not.

Then:

(c) Resource do not include:
(1) return of principal or capital;
(2) accounts receivable; or
(3) benefits paid in accordance with aid for dependant families with
dependant children.

So again, income is not income.

 

[LdiJ]

Update

Everything has been reported to the IRS. They were quite excited about this one. It will take some time, but I expect that it will eventually hit the news.

 

[Splitz]

Everything has been reported to the IRS. They were quite excited about this one. It will take some time, but I expect that it will eventually hit the news.

I'm just curious to know your motivation for "reporting" something that has been going on for decades as contracts within the industry. Are you trying to screw the employee or trying to get the employer to follow the rules as they already are?

Pretty sure, that the IRS would have already flagged it with as many aviation contractors that are across the country.

Employers are following the per diem publication to the letter, there is an employee that has a home address within the 50 mile boundary and isn't getting the per diem, his base rate is $26/hr.

Funny, how this thread went from a simple question involving child support and per diem, to somebody on the internet trying to get their rocks off to the IRS. Oh, and everything on the internet is true.

 

[Proserpina]

I'm just curious to know your motivation for "reporting" something that has been going on for decades as contracts within the industry. Are you trying to screw the employee or trying to get the employer to follow the rules as they already are?

Pretty sure, that the IRS would have already flagged it with as many aviation contractors that are across the country.

Employers are following the per diem publication to the letter, there is an employee that has a home address within the 50 mile boundary and isn't getting the per diem, his base rate is $26/hr.

Funny, how this thread went from a simple question involving child support and per diem, to somebody on the internet trying to get their rocks off to the IRS. Oh, and everything on the internet is true.

Just like IP addresses.

Wonderful thing, technology.

 

[LdiJ]

I'm just curious to know your motivation for "reporting" something that has been going on for decades as contracts within the industry. Are you trying to screw the employee or trying to get the employer to follow the rules as they already are?

Pretty sure, that the IRS would have already flagged it with as many aviation contractors that are across the country.

Employers are following the per diem publication to the letter, there is an employee that has a home address within the 50 mile boundary and isn't getting the per diem, his base rate is $26/hr.


Funny, how this thread went from a simple question involving child support and per diem, to somebody on the internet trying to get their rocks off to the IRS. Oh, and everything on the internet is true.

Don't you understand that the bolded is what guarantees that its fraud? If the people residing within 50 miles were only getting $8.00 an hour then there would be no fraud.

Or, in the alternative if you were getting $26.00 an hour PLUS per diem, it would not be fraud.

The fact that they are reclassifying part of your wages as per diem when you live more than 50 miles away is FRAUD.

My motivation for reporting this is to get the employers hammered for fraud. Unfortunately the employees may also get hammered, but I cannot help that.

The rest of the taxpayers should not have to foot additional tax bills so that your industry can commit widespread fraud.

You don't have to believe me, you can consult a tax attorney. However, make sure that you give the tax attorney ALL of the details you gave here, or you will not get accurate advice.

 

[CJane]

OP, what you don't seem to be grasping is that what the IRS considers taxable income is completely irrelevant to whether or not the OAG considers something to be income. That's why they have that 'all other income...' as #5. It's also why it doesn't detail every single potential stream of income.

If the OAG suspects that the reclassification of your pay as per diem is unreasonable, it WILL be used in the cs calculation.

Frankly? I think it's highly likely to happen. And the OAG doesn't care that you use almost 80% for living expenses. That's what most of us do with our paychecks too.

 

[Splitz]

If the OAG suspects that the reclassification of your pay as per diem is unreasonable, it WILL be used in the cs calculation.

I have put together a list of expenses for this month of the per diem being used to live in the assigned location. I'm hoping there could be a compromise between myself and my ex-wife on this matter. If I can get her (the OAG representative is there as a mediator) to agree to subtracting actual expenses from the top of the net income line, this would be more favorable. Obviously, 25% of $8/hr isn't enough in child support, I get that. I'm hoping there is a fine line. If the per diem is taken into account 100%, there is no reason to continue this job, because I couldn't afford the child support and live in the assignment location. We also couldn't sell the house due to the horrible housing market right now + moving costs and finding another place to live.

I've said this to my ex multiple times that I'm not trying to negate my responsibilities as the NCP. But at the same time, it needs to be fair. When I had my CS modified back in 2006, the judge looked at my overtime pay, and added that as part of the calculation. Was the judge correct? Yes, the guidance in the code allows that. The problem was, about 2 months after it was modified, the OT went from 15 hrs/week to ZERO. The OAG office didn't care and said "deal with it", how is this fair? Once its modified, you have to wait 2 years. Lets say for sake of argument that I got a 2nd job, to cover my own expenses because child support was based higher than it should have? Then when you show your 1040, they raise your child support AGAIN because you have 2 jobs to live yourself. Its endless.

Usually when I speak about items like this I get a "well, you shouldn't have had kids". No kidding, but there are problems with these systems and it needs to be rectified, because the NCP gets the shaft and it seems to be never ending until one or both children turn 18.

Frankly? I think it's highly likely to happen. And the OAG doesn't care that you use almost 80% for living expenses. That's what most of us do with our paychecks too.

The per diem that I'm spending, costs me to live in the assignment location, as well as support my actual household 273 miles away (mortgage, electric, water, property taxes, insurance). Because of this extremely volatile job market, assignments like these are necessary.

You all keep throwing "fraud" and "other tax payers shouldn't foot the bill", even if they did tax me on $26/hr, I can write off just about ALL Expenses while living in the "assignment" location anyway. Start with the $600/month in rent + expenses back and forth from San Antonio to Fort Worth every weekend, depreciation on the vehicle as well as mileage. So, at that point, there is no difference between $8/hr and $26/hr taxable wages.

So take your pick, either I claim it in January, or don't give the US Government an interest free loan from Jan 1 - Dec 31 to waste on heath care for illegal immigrants and other BS socialistic programs.

I'll say it one last time, please keep this topic about per diem and child support, and a little less "bad company for defrauding the US Government".

 

[CJane]

I have put together a list of expenses for this month of the per diem being used to live in the assigned location. I'm hoping there could be a compromise between myself and my ex-wife on this matter. If I can get her (the OAG representative is there as a mediator) to agree to subtracting actual expenses from the top of the net income line, this would be more favorable. Obviously, 25% of $8/hr isn't enough in child support, I get that. I'm hoping there is a fine line. If the per diem is taken into account 100%, there is no reason to continue this job, because I couldn't afford the child support and live in the assignment location. We also couldn't sell the house due to the horrible housing market right now + moving costs and finding another place to live.

I'd love it if MY ex, or the state, would allow me to subtract MY living expenses from my income before determining the child support that I pay to my ex too. But that isn't how it works ANYWHERE.

And while it's not "fair" to the grown-ups involved, it's not designed to be. It's set up so that the children involved get "first dibs" on the income of their parents. AND THEN their parents can factor in living expenses outside of the support obligation.

My son's father is currently trying to get his "living expenses" subtracted from his income pending a child support modification too. The IRS "let" him deduct over $100,000 in "expenses", leaving his income in the negative digits. The state? Not so much. THEY allowed him around $70K in expenses (he's a 1099 employee) and couldn't care less that the IRS lets him claim his shoes as deductions.

I certainly don't get to say "Well, my house payment is $550/month and I have to drive 45 miles to work every day in order to have a job AND live in the kids' school district, so I get to deduct mileage on my car...

Doesn't work that way. Ever.

Usually when I speak about items like this I get a "well, you shouldn't have had kids". No kidding, but there are problems with these systems and it needs to be rectified, because the NCP gets the shaft and it seems to be never ending until one or both children turn 18.

It's well over 18 in most states. And I guarantee you that it STILL costs more to RAISE a child than to pay support on one. Even if my son's father's support goes up to what the state has estimated (nearly triple what he's paying now), it's STILL not what it costs me to actually RAISE the child. It will barely cover daycare and health insurance, not to mention food, housing, etc.

The per diem that I'm spending, costs me to live in the assignment location, as well as support my actual household 273 miles away (mortgage, electric, water, property taxes, insurance). Because of this extremely volatile job market, assignments like these are necessary.

Your "actual household" is legally irrelevant though. First kid, first dibs. New wife and new kids maybe need to come live with you at the "assignment location". You'll be making the same $$, because your "wages" will be higher, and you won't "have" to commute back and forth on the weekends.

 

[Splitz]

It's well over 18 in most states. And I guarantee you that it STILL costs more to RAISE a child than to pay support on one. Even if my son's father's support goes up to what the state has estimated (nearly triple what he's paying now), it's STILL not what it costs me to actually RAISE the child. It will barely cover daycare and health insurance, not to mention food, housing, etc.

You don't know my divorce decree, all divorce decrees are different and have different stipulations in them. My child support stops when they either #1 graduate high school or #2 turn 18.

You are highly exaggerating how much it costs to raise children the older they get. I have a 13 year old step daughter, the only expenses increase there is, is food and the occasional clothing item, and the same would go for my 11 and 9 year old. Obviously, if they are before school age, costs increase, but as they get older, the costs DECREASES. They don't need day care which helps with everything. And with my ex wife's deadbeat, unemployed live in boyfriend, why do "I" need to support his lazy ass too?

I've figured this out, because the CP said "yea, I take half of your child support and put it in a savings account", so, if she doesn't need it, she should return it to me. /sarcasm

Also, please read the entire post before responding, if you had read, I can't move the rest of the family due to housing issues (sales market, bad rental market). That being said also NEVER EVER move for a contract job, because you could lose the job the next day. It isn't as bad as a direct paid employee, however, being a contractor on a specific contract for X amount of aircraft, who knows when the child support would "disappear".

 

[pattytx]

And I don't care what the stated "per diem" is, you can live on a lot less than $144/day if you watch your pennies; you can actually MAKE money on the deal. I know, I did temp housing for 2 months in a Motel 6 near Baltimore, MD. Sucked, but I did it and here's how.

In San Antonio, you can get a Motel 6 for around $54/night plus tax; weekly rates are also available that would cut that down. Meals maybe $20-$25 a day. Laundry, maybe $5-6/week at a laundromat. Get a cooler and a mini-microwave if the room doesn't have them already and you can save even more on food. Take your lunch in an insulated lunch bag instead of buying it.

BTW, if your employer is deducting taxes on a per diem less than or equal to the amount specified by the government, there should be NO taxes withheld on it; it gets the same treatment as an actual dollar-for-dollar expense reimbursement. Nor does it go on your W-2. It appears they are doing this correctly.