IRS announces that per diem rate remains unchanged for 2009

You may consider these "big ticket" items, but I never record them as such on a tax return unless the cost is over 500.00 to begin with.

 

Yeah, with the exception of the cb, those all were. Well, one gps was 450, I think.

 

The thing to remember is that assets must be identified as being used 100% and such.

Using a practice of expensing such items as a reasonable expenditure through the year will allow one to bypass the regs on the 100% rules. In addition, less to keep track of each year on the depreciation schedule when things die and are replaced or sold for a quick buck.

 

I'm pretty sure it's 80% of the unreimbursed amount. If you're getting per diem pay, such as $.08 per mile, that's considered an expense reimbursement. So, you'd multiply the $59 per diem allowance times the number of days away from home, subtract the per diem reimbursement pay you got, then deduct 80% of the difference.

Maybe the accountant types on this forum can clarify this.

Unless you're really spending more than $59 per day on meals and tips, use the per diem.

 

The standard deduction of 59.00 is taken without consideration of the miles driven. It is subject to 80% deduction.

You can take the actual receipt method as well. The total involved is then subject to the same 80% deduction.

 

Right.

What I'm not certain about, Roadmedic, and I hope you or some of the other number crunchers on this forum can clarify this, is whether the 80% applies to the unreimbursed portion or to the whole thing.

Let me give you an example. Suppose a driver drives 125,000 miles and gets an $.08 per diem, totaling $10,000 expense reimbursement. He spends 200 days away from home, and takes the $59 per day allowance, totaling $11,800 in meals and incidentals expense allowances.

So, would the 80% apply to the whole $11,800, or only to the $1,800 that was unreimbursed?

I'm sure I'm not the only one with this question.

Thanks in advance.

Best,

 

Safest bet.

Take the entire qualified deduction. Less the per diem plan out of it and then take the percentage for the 80% deduction.

 

Thanks. That's what I thought, but the instructions for Form 2106 are very confusing on this issue.

 

They are at that.

Try doing these returns by hand like we did in the 70's. It is why the rules are so ingrained.

 

OK, so if we can take this one or two steps further, I'd sure appreciate it.

Suppose a trucker forms an LLC (or a corp).

Step 1. The LLC pays him $59 per day (or whatever the maximum per diem is at the time) for every day he's away from his tax home. From the LLC's point of view, this would be a 100% write off. From the trucker's point of view, this is an expense reimbursement, and the 80% rule would not apply.

Step 2. Since the trucker would have nothing to deduct for meals expenses, if he had no significant other personal deductions, he could then take the standard deduction instead of itemizing and filing Schedule A.

Am I correct on this?

Further disclaimer (as if it's not obvious): I don't do tax returns — I'm a strategist, not a number cruncher.

Some people consider the terms "bean counter," or even "number cruncher," to be put downs. Whenever I use such terms, I used them as terms of great reverence. I don't have that kind of mind, and really admire and appreciate people like you who do.