Tax Questions regarding Per Diem allowed-
Hi everyone, and thank you for reading my question, as I realize the this issue is beaten to death, but I could not find the answer I needed in any of the posts I searched through. (I did look first, I promise)
My husband is a company driver and is not paid a per diem by his company. He was told by another driver with his same company, that because they travel to the North East (he mostly runs NY, CT, RI and Mass) that he can claim $95 per diem for each day he is out. The accountant I spoke with today said he can claim $59 at 100%, but I didn't discuss area with her, I was just trying to find out which receipts, etc I should be keeping.
I have looked online and cannot find any amount other than the $59, or any information leading me to believe that per diem varies depending on where you drive. I'm wondering if the other drivers were just pulling his leg since it has been years since he's driven OTR. (We've been together 4 years, but he has driven locally until he started with Gaines in June. He drove OTR for 6 years before we were together- so I am really new to this, he is getting a refresher, lol.)
Hi and welcome. First off your going to find a lot of differing opinions on per diem but the ONLY one that matters concerns hours of service (HOS) regulated employees. It's really simple any period of time that hubby is away from home and required to take the mandatory 10 hr break is considered 1 day, the day he leaves and the day he comes home are each counted as 3/4 (75%)of a day. So if he left on Monday and comes home on Friday he has 3/4 of a day for Mon. 3 full days for Tue.-thur. and another 3/4 for Friday for a totle of 4.5 days. Per deim is for the cost of meals on the road and for HOS people a flat amount and is NOT figured by zip code!
Now I'm embarressed to admit but I forget the exact $$ that you can claim for each day but it is approx $59. You do NOT need to save reciepts for this just have his log book for proof. The reciepts you do want to save are for non-meal items, motels,parking,tools,cleaning stuff& ATM fees!
So, the motel- should he get one instead of sleeping in the truck, is not included in the $59, but is extra? Hm, nice to know if he ever has to get a room- do I understand that correctly? I wonder if they were counting hotels as the extra $.
He usually leaves Sunday morning and is home Friday night or Saturday morning. Sometimes he is home one night in the middle of the week, depending on if they have him switch out in Jersey a few times or come all the way back to NC once. Thank you for letting me know how to count the days, I wondered about that.
I dont want to get all the way to tax time and find out I should have kept or recorded this or that and didn't.
Thanks so much! If anyone else has heard of IRS allowing $95 per day, please let me know.
The per deim is for the cost of food while away from home but cause you have to eat at home to that's why the IRS's rule is 85% of so much per day( I'm not sure the exact figures) get a good tax preparer that does trucker taxes, don't rely on some one like Hr block they do the "one size fits all". In short ANYTHING AND EVERYTHING he buys for the truck, keep the reciepts, even the cell phone bills if it's used for the biz but be careful with that one, the IRS is cracking down on that so I don't even bother claiming that.
PER DIEM is definately not at $95/day. save all non food reciepts.
I'll have some info for you on this this weekend. ONE is correct, that $95 figure is wrong no matter what it includes or where the area is. In fact, it's interesting to me that 95 is 59 backwards. Wonder if someone is dislexic?
I am, toss in old timers memory and it's all down h i l l . Thank god the key board keeps the D's & B's correct not to mention the #3 & E's you should see my hand writing
Originally Posted by golfhobo
I believe the deduction this year went up to $59/day. I think the actual rule reads that you can take 80% up to $59/day without keeping receipts. If you want to keep track of your receipts and they go higher then you can take the actual deduction. It is cleaner to just take the deduction. If you want to read the actual rule you can to to www.irsforms.gov.
But if a company pays me a per diem then I can't claim this on my taxes, right?
Originally Posted by strawberryrhubarbpie
I would have to go back over my tax returnes but there are two per diem amounts, depending on where you were during the off time you can claim the higher amount but it does have to be documented. I think the higher amount is 62.00 or 65.00??? But a good accountant will know this.
Even the mob knows how important a good accountant is.
It depends. Any amount that they pay you for per diem that is NOT figured into your taxable wages cannot be claimed by you as a deduction. For example, my first company paid me 7 cpm as per diem and it was not reflected in my taxable wages on my W-2. This is one of the "acceptable practices" that the IRS allows. So, I paid taxes on the rest of my wages, and claimed no deduction at all for per diem. My company now pays me $30 per day as per diem and does not include it in my taxable wages. However, I can deduct an additional $29 per day FROM my taxable wages. [Actually, I believe my accountant shows the per diem paid as additional income, THEN deducts the total of $59 per day.]
Originally Posted by strawberryrhubarbpie
I'm no tax accountant, but I did say I'd weigh in on this. Here's a few things I think I understand:
1) If your truck has a sleeper, you cannot claim motel expenses unless your truck is in the garage. That's why it's good to get your dispatcher to pay for motel rooms whenever you can get him to. If he pays for it, or reimburses you for it, you can't claim it as a deduction. I he provides you a truck with a sleeper and YOU decide to get a motel room.... it's on you.
2) The 85% or 50% rules don't really apply to us because the standard per diem amount will almost always be a higher amount. NONE of us can eat $70 - $120 or more of food a day! And you would have to do it every day to break even cuz whatever method you use, you have to use for the entire year. These rates are for salesmen who treat clients to expensive dinners and are designed to cut down on the extravagances of "gentlemen's clubs" and stuff.
3) The standard deduction is better than the individual location method for many reasons, not the least of which is, that the rates in certain areas are ONLY higher when you are deducting motel rates.
Now... here is the IRS reg that pertains: Publication 463 (2010), Travel, Entertainment, Gift, and Car Expenses
Scroll down about halfway down the page and find the bold heading that says special rate for transportation workers.
Here is the text:
Pay close attention to the section on departure and return dates and read the example of JEN. Not sure why they used this since she is not a trucker, but... the important part is that she/we is/are allowed to use method 2 whereas government employees are not. (remember, these rules are mostly written for gov't employees.)
Special rate for transportation workers.
You can use a special standard meal allowance if you work in the transportation industry. You are in the transportation industry if your work:
- Directly involves moving people or goods by airplane, barge, bus, ship, train, or truck, and
- Regularly requires you to travel away from home and, during any single trip, usually involves travel to areas eligible for different standard meal allowance rates.
If this applies to you, you can claim a standard meal allowance of $59 a day ($65 for travel outside the continental United States). Using the special rate for transportation workers eliminates the need for you to determine the standard meal allowance for every area where you stop for sleep or rest. If you choose to use the special rate for any trip, you must use the special rate (and not use the regular standard meal allowance rates) for all trips you take that year.
Travel for days you depart and return.
For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). You can do so by one of two methods.
- Method 1: You can claim 3/4 of the standard meal allowance.
- Method 2: You can prorate using any method that you consistently apply and that is in accordance with reasonable business practice.
Jen is employed in New Orleans as a convention planner. In March, her employer sent her on a 3-day trip to Washington, DC, to attend a planning seminar. She left her home in New Orleans at 10 a.m. on Wednesday and arrived in Washington, DC, at 5:30 p.m. After spending two nights there, she flew back to New Orleans on Friday and arrived back home at 8:00 p.m. Jen's employer gave her a flat amount to cover her expenses and included it with her wages.
Under Method 1, Jen can claim 2½ days of the standard meal allowance for Washington, DC: 3
of the daily rate for Wednesday and Friday (the days she departed and returned), and the full daily rate for Thursday.
Under Method 2, Jen could also use any method that she applies consistently and that is in accordance with reasonable business practice. For example, she could claim 3 days of the standard meal allowance even though a federal employee would have to use Method 1 and be limited to only 2½ days.
It clearly states that under method 2, we can take the full $59 rate for all days that we are on the road. (I would think this would only apply if SOME meal was consumed, or in our case.... SOME part of a S/Berth or off-duty break was required.) By using the $59 (prorated/standard) rate, you are compensating for both the higher costs of meals in some areas, AND the "partial days."
So, IMHO, if you leave at 10 p.m. on day one, you probably shouldn't count that day. However, (and this is where split logging comes in handy,) IF you take even a 2 hour break for dinner and/or start a sleeper or off duty break BEFORE midnight.... I'd say you can take the whole $59 for that day.
Jen only spent two nights in a motel getting rest, but she had to EAT all three days. And this publication clearly shows that she can take the full rate for all three days (under method 2.)
There is another pertinent reg, #1452 I think it is, and I've read some stuff about "not being allowed if you return to your home," but... as I understand it, if you have to take an HOS break at any time during that day, you can claim the whole day.
I drive a dedicated route and get home every night, but because I'm a member of a team and have to SLEEP during that day while on the road, (as well as eating,) I am allowed to take the FULL per diem deduction for every day I work.
My advice to all is this: Take the full $59 deduction for every day you have a log sheet for as long as it includes a full 2 hr break or any part of a sleeper or 10 hr off duty break and take your chances against a one-in-a-milion tax audit! Worst that can happen is that they disallow a FEW days which will cost you a few dollars in additional taxes. It will be much less than the money you left on the table by claiming only 3/4 of the rate for all departure and return dates!
I also suggest you print a copy of the reg I linked for you, and IF you ever get audited... ask the auditor to explain why "my" interpretation is not substantiated therein. I'll bet he can't.
Remember... friends are few and far between.
TRUCKIN' AIN'T FOR WUSSES!!!
"I am willing to admit that I was wrong." The Rev.
Its very simple. Basically you don't need to keep reciepts. The reciepts won't do anything for you. If the allowed per diem is 59 dollars a day which I believe is correct than that is what you can claim wether your daily expenses come to more or less than that. On your taxes you have a standard deduction which is 5,950 for individuals for 2012. If your per diem of $59 X Days out comes to more than that you simply put that number in the place of the standard deduction. So lets say your husband is out for 300 days in 2012. 59 x 300=17,700. The IRS doesn't let you claim that 100%. You instead only get to claim 80% of that. There is then an additional 2% subtracted (can't remember for what). Its important to remember that the 2% comes off 80% adjustment. So $17,700 X 80% (or .80) = $14,160. Then you take $14,160 X 2% (or .02) = $13876. That is the number he will use instead of the 5950 default deduction. As for claiming more for being in the north east I doubt that is true. Turbo tax will be able to ask you all those questions. I use turbo tax every year and they have been great
Originally Posted by kneedeep75
To back others up here $59 a day, 80%, and 3/4 for partial days are all correct. It doesn't matter if you leave at 11:30pm, it's still 3/4 of a day per diem. Also it is my understanding that when filling out the per diem on TurboTax you put in the amount at 100% and it will adjust it properly. The same goes for using and accountant or whoever. If you give them the amount at 80% they may take another 20% off not know that you already did. Region doesn't change per diem. I've never heard of this additional 2% either.
Someone dredged up an old thread, and wanted to give advice.
I really don't care, cuz I have no questions about this. But... both of the last two posts were, at least partly, wrong.
If anyone is "tuning in" here for answers.... they may be confused by the last two posts. If not.... I will just let them slide.
Y'all can listen to whomever you choose. I'm just telling you that what they told you is wrong.
I know about the 2%, and jtannillo is wrong in her/his computations.
TK Trucker is wrong about the 3/4 day deduction. I already explained this.
I don't think anyone is really checking this thread, as it is an old one, but... it IS tax season. If anyone has a question, and (perhaps) has a problem with the MATH that someone posted...
I will go thru all of this again. I'm bored.