Trucker Tax Tips & Deductions

Here's another one:

We all know that $59/day is the standard deduction for meals,etc (x80% of course), but different cities have different rates. a) is it worth it to go thru the year day by day and apply specific rates to specific locations and b) where would you find the rates for each city?

 

Well never mind on that one. The rates are pretty easy to find (http://www.gsa.gov/portal/category/21287) and while some are more than the standard 59, most are less, so while you may get to claim 71 for L.A. or Seattle, you wind up taking the lesser 46 for 'undefined' areas if going the itemized route. Better to take the standard 59, IMO.

 

As an accountant let me make just a couple of suggestions. Buy yourselves a big brown expandable folder at Walmart or any office supply store and save every receipt you get your hands on. Then let your tax person take it from there. They also have those new scanners that are small enough to carry with you that you can scan every receipt into your computer and then toss them. You can set up different catagories ie. food, hotel, misc., etc... That would save you $$ if your tax person charges by the hour. This takes no time at all and could be done on your 34 or better yet buy two folders and when you get your home time change them out and let your better halves do that for you when they can. The more you can do for your tax person the less they will cost you. Just my 2 cents.

 

Great info on this list, including the list of possible deductions.
My other-half is a company driver OTR 48-states, for 3-5 weeks at a time. When he started with X-company, he was told that the company paid per diem pay in lieu of full miles - mandatory and no opting out. His company pays him $0.135 per mile untaxed as per diem pay, and is taxed (Fed, State, FICA) on the other portion of his total per-mile pay. His wages earned last year look really bad on his W-2, but the per diem rate noted makes up for it. However...(here's the sticky part) since he's on E-logs I have a couple of questions:

1) I try to keep track on a calendar here at home but how can we get an "official" record of his total days out to check per diem since he doesn't have paper logs? Through QualCom? How do we ask for the info from QualCom or should this come from his company's HR?
2) Since the standard daily per diem rate is $59/day, does this have any effect on the per diem pay he has already received on his weekly checks? In other words, can (and should) he use one amount or the other, based on the number of days out?
3) Is there an online list or spread sheet that someone has designed to help categorize the million receipts he sends home?
...and....
4) Has anyone here purchased one of those personal receipt scanners that categorizes them (NeatReciepts), and does it tie-in with home-office software like Quicken, QuickBooks or Turbo Tax?

This is the first time he's EVER had to deal with the automatic per diem pay, and never thought to claim the standard per diem deduction, since up until 3-yrs ago, he'd been a local or short-haul regional driver.

Thanks!
Nunu

 

for qualcomm info try this

https://dhos.myqualcomm.com/dhm/ ...

at .... enter your spouses company code.

 

Most carriers that utilize electronic logs will have an optional service that can forward those records via fax or email to a place you designate.

If you do not have this option (carriers delete all log records after 6 months) then your husband can keep a second logbook that is written for tax purposes. It will require that he DUPLICATE his activities each day. As long as the elog and the written log is IDENTICAL and has "for tax purposes only" written on the cover of the book there should be no issue with DOT or LEO's of any kind. Most older LEO's will understand the written logbook much easier than the e-log anyway.

It may have an affect on his allowable deductions when he files his tax return.

Read the following thread and it may help;

http://www.thetruckersreport.com/truckingindustryforum/trucker-taxes/167397-2011-per-diem-3.html


Here is a scenario I posted in the above thread that illusrates the per diem issue;

Let me try to explain this again. Carriers usually pay a driver per diem based on a mileage rate;
Lets say that rate is .10 cpm.
Lets say the driver makes .25 cpm taxed.
Over the course of a year Mr. "Smith" will drive 130,000 miles.
Taxable earnings 130,000 miles x .25 cpm = $32,500.00
Untaxed Per diem 130,000 miles x .10 cpm = $13,000.00

Mr. Smith is a regional driver and gets home every weekend so he only worked 50 weeks out of the year (2 weeks paid vacation). 5 days per week x 50 weeks = 250 days that Mr. Smith was on the road and qualified for the per diem.

250 days x $59.00 per day = $14.750.00 x .80% (the actual amount the IRS allows us to deduct) drops the allowable deduction to $11,800.00.

The Per diem also has a 2% AGI floor so we must further reduce the allowable deduction; $32,500.00 x .02% = $650.00

$11,800.00 - $650.00 = $11,150.00 deduction.

Now the carrier actually paid Mr. Smith $13,000.00 but he only qualified for $11,150.00 This means Mr. Smith "may" owe tax on the difference which is
as follows; $13,000.00 - $11,150.00 = $1850.00

The above is a rather simplistic illustration of the concept I am explaining. The rest of Mr. Smiths return will have to be taken into account to determine if he actually owes the IRS any money or not.

 

Thanks for the VERY helpful posting. I can use those guidelines (once I have everything sorted & added) then find what will be the best way to show it.

One last question as I'm entering the last of the receipts:

Since these receipts are from multiple states using various sales tax rates, I am only including the sub-total of each receipt, not the final (taxed) total. Is this the correct way to total them?

Thanks!

Nunu

 

Use the total paid.

 

Can you deduct the clothes you work in as uniform?

 

Technically no. They must be suitable for the occupation you are working in but not useable at other times. A company that requires a uniform with their logo on it would qualify but for normal jeans and shirts no.

Here is the relevant section from the IRS;

http://www.irs.gov/publications/p529/ar02.html


Work Clothes and Uniforms






You can deduct the cost and upkeep of work clothes if the following two requirements are met.

• You must wear them as a condition of your employment.
• The clothes are not suitable for everyday wear.

It is not enough that you wear distinctive clothing. The clothing must be specifically required by your employer. Nor is it enough that you do not, in fact, wear your work clothes away from work. The clothing must not be suitable for taking the place of your regular clothing.

Examples of workers who may be able to deduct the cost and upkeep of work clothes are: delivery workers, firefighters, health care workers, law enforcement officers, letter carriers, professional athletes, and transportation workers (air, rail, bus, etc.).
Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear.
However, work clothing consisting of white cap, white shirt or white jacket, white bib overalls, and standard work shoes, which a painter is required by his union to wear on the job, is not distinctive in character or in the nature of a uniform. Similarly, the costs of buying and maintaining blue work clothes worn by a welder at the request of a foreman are not deductible.
Protective clothing. You can deduct the cost of protective clothing required in your work, such as safety shoes or boots, safety glasses, hard hats, and work gloves.
Examples of workers who may be required to wear safety items are: carpenters, cement workers, chemical workers, electricians, fishing boat crew members, machinists, oil field workers, pipe fitters, steamfitters, and truck drivers.