Trucker Tax Tips & Deductions

Wow rbd171! If you made over $100k last year, what company are you driving for because me & my OTR sweetie will be there next week!

 

The information I gave of 60 miles is a bit on the high side. The IRS informed me that it was around 40 miles but would not provide me with support of their stand.

Their position was that when in the area of the tax home, no expenses were allowed. This was the result of them trying to declare the terminal 300 miles away from my home was my actual tax home and no expenses getting there allowed or motels.

The case is in Appeals at this time.

 

My gross was $106k. I took $37k worth of meals and lodging per deim. My total federal income tax was only $198. I took a lot of hometime off and several extended vacations. I am not rich by any means but I have never made so much money and vacationed so much at the same time. It was a fun year for my wife and I.

I work for truckmovers and Bennett drive away.

 

So the only way to know 100% for sure is after an audit? Gotta love secret tax rules. Hopefully I can find a local tax expert who would know if it's likely. Anyone got a link to some web site where I can find such a person? I'm assuming not all tax professionals have the necessary experience with the specifics of truck driver tax returns.

 

Let's see. . .

$37,000/($59x.80) = 783.89 days. How did you manage to take over two years worth of per diem in one year? Inquiring minds want to know.

 

Also how do you pay $198 fed tax on the remaining income? Are you guys smellin something?

 

I am my own tax expert. So, I did not have to look for one.

 

If you are self employed, you cannot take a lodging per diem. That has been the rule since 2007.

 

My tax man says you can, and the 59 rate is cheating yourself. Of course you need to get your own tax professional but much of the correct info is here on the interwebs.

The app worldwide per diem will give you the lodging AND meal rate. We get 80% of that. If you want to take the lower flat rate of 59, you can but you are cheating yourself.

The lowest per diem is 77 and 46, totaling 123. If you stay in canada, as I do, it is much, much higher.

 

I decided to not keep motel receipts for about 2750.

IRS disallowed them per the rule.

I am an enrolled agent to practice before the IRS.

I am on my phone and cannot link.


Now, on the laptop.

Here is link to the revenue procedure 93-50

http://www.journalofaccountancy.com/Issues/2001/Feb/DeductingTravelExpenses.htm


Deducting Travel Expenses

By Edward J. Schnee
February 2001
In general, personal expenditures such as food and lodging are not tax deductible. However, a taxpayer may deduct these costs while he or she is away from home overnight for business purposes. Instead of deducting actual expenditures, taxpayers can use the per diem amounts for food and lodging in revenue procedure 93-50. The applicability of this revenue procedure to self-employed individuals recently came before the courts.

Paul Duncan was an independent over-the-road truck driver who lived in Tazewell, Tennessee. He contracted all his cargo-hauling assignments from Knox Cartage in Knoxville. In 1994 he traveled 130,000 miles. On his 1994 tax return, he deducted food and lodging expenses for away-from-home travel based on the per diem amounts in revenue procedure 93-50. He also deducted the cost of meals for days he stayed in Knoxville to obtain a cargo. The IRS denied the deductions.

Result. For the IRS. IRC section 162(a)(2) permits taxpayers a deduction for travel expenses such as food and lodging when they are away from home overnight. Section 274(d) limits the deduction to amounts for which a taxpayer has the necessary substantiation. Therefore, a taxpayer may not rely on the "Cohan rule," which allows him or her to estimate expenditures. While taxpayers can use the per diem amounts found in revenue procedure 93-50 to ease their administrative burden, they must otherwise comply with all of the code's substantiation requirements.

The revenue procedure limits the use of per diem amounts for lodging to cases where an employer reimburses an employee with a fixed daily amount. That means self-employed individuals may not use this method for lodging expenditures. Instead, they must prove actual expenses based on the rules of section 274(d). Duncan could not deduct any lodging expenditures because he did not have the required proof. Self-employed individuals may use the per diem amounts for meals since the revenue procedure specifically authorizes them to do so. In this case Duncan was allowed to deduct such per diem amounts.

Duncan deducted meals in Knoxville on days he stayed over to obtain a cargo the next day. The law requires truckers to rest 8 hours in a 24-hour period. Duncan argued he needed to stay in Knoxville to meet this requirement and to obtain a cargo. Had he taken the time to drive to his house, he would not have been able to leave as early the next morning and the cargo would have gone to another trucker. The Tax Court rejected Duncan's "need to rest" argument. For tax purposes, your home is where your principal business takes place, not your residence. In this case Knoxville, not Tazewell, was Duncan's home. Since he was not away from home, he could not deduct the cost of meals while he was in Knoxville.

Self-employed individuals must carefully substantiate all out-of-town travel expenses. They may use the listed per diem amounts only for food. Lodging deductions must be for the actual amount spent. Failure to comply will result in a complete denial of the deduction.


From IRS publication 463

http://www.irs.gov/publications/p463/ch01.html


There is no optional standard lodging amount similar to the standard meal allowance. Your allowable lodging expense deduction is your actual cost.