Interesting per diem question

I assume when you use the standard deduction comment, you are referring to the per diem amount?

 

Yep.
I have been doing my own taxes since 1973.

 

No problem. The reason behind the per diem is to make it easier for truckers to compute their meal deductions without being required to figure each locality for the local per diem amount.
The per diem figure is for the cost of food during the day. The amount you would have for snacks and etc would not be material if you were to include them in addition to the per diem amount.

I have prepared returns also since 1974. However, I was professionally paid to prepare them since 1976. In 1982, I started doing them at home in addition to where I worked. It makes me glad to know there are some people that rise to the challenge of the returns.

If you have any questions, please feel free to ask me if you want. I have no vested interest in expanding my business.

 

so i have a ? i'm a newbie and i will be out 5-7 days and home weekly. would it be better for me to opt for the per diem or just take the deduction?

 

That really goes into more detail.
Not that I am asking for this info, just think for yourself.
What is your age?
What is the income bracket on the return (Married/Single)
What is the company policy?

Generally, I am not one to support the per diems through the company. It lowers the amount of your social security earnings therefore lowering the amount the company has to pay tax on. It also reduces the amount of your earnings for when you want to buy a house, or have a claim for workmen's compensation.

Since you are a company driver, the per diem is taken as an itemized deduction under the miscellaneous section subject to 2 %.

 

Exactly right. I would NEVER suggest taking the "per diem" the employer offers. One excellent reason: I got injured on the job, and the worker's comp was based on my "pay" MINUS the per diem. I think the employer "gave" $35 a day...
well he didn't actually "give" me a thing, the PER DIEM was subtracted BEFORE TAXES from my gross income ($35 X 7days=$245) then it was added BACK to my income. SO, the PER DIEM reduced my taxable income by about $245 per week. ($12745 year). It ALSO reduced the amount that should have gone into Social Security, Unemployment and also reduced the amount of WComp I was eligible for when I got hurt. The short term benefits of taking an employer sponsored PER DIEM are outweighed by the long term losses. It ONLY saves an employer money thru less money for employer required employment taxes.

 

pub 463, says you can break your day up anyway you choose so long as you are consistent. mine is 4 periods per day; midnight to 6am, 6am to noon, noon to 6pm, 6pm to midnight.

as in the example... in the book... you can claim 3/4 day per diem for the departing day, and 3/4 day per diem for the returning day.

work all day, spend the night, work all day, is 1.5 days per diem.

you could be a real knob and per diem per hour as long as you did it the same for the whole year... I'm not that anal. yet... hehehe

the test for claiming travel is not over nite... the test is if you were required to take a rest break. it specifically mentions a long day won't cut it, you have to take a required break.

its illegal to drive tired so I asked about a sleeper break mid day and claiming a per diem on it. 3/4 day even though it wasn't over nite.

cpa said you might get away with it... but more than likely you are asking, begging, for a full audit. I've left it at the legitimate overnite stays after that talk.

 

The per diem issue that is being discussed here is where the company reduces your taxable income by a per diem amount to save on SS Tax.

 

While listening to Sirius channel 147 a couple of months ago they had a fella on discussing trucker taxes and specifically this per diem question.

He said something to the effect that the IRS was now allowing drivers to claim "a full days per diem" rather than using the partial day formulae most of have been using. The only key was they had to use it uniformly throughout the year (much like the argument of receipts vs daily allowance based upon the per diem).

I for 1 was elated to hear this and have been hoping to catch this guy again on the radio to double check this.

Has anyone else heard this segment or do you remember the guys name?

I also file my own taxes and try to keep on top of any and all changes in the tax code as it relates to trucking and may benefit me in the long run.

 

I have never listened to the guy on the radio. I have always taken a full days per diem for the day left and the day returned. If the IRS were to question it, it is something they can adjust. However, the amount involved is not one of concern to an agent.