Will we lose per diem

I read through this until my eyes started bleeding. Upon a cursory view and my with non-attorney standing, I read that the old rules of using the standard daily meal allowance for employees subject to HOS rules STILL HOLDS. I bolded some of the pertinent information further down. But it's too involved for me to be able to say for sure.

https://congress.gov/115/bills/hr1/BILLS-115hr1ih.pdf

below is just a small partial cut and paste from the web page ...

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1. (c) EXCEPTIONS FOR REIMBURSED EXPENSES.—
   
   
2. 2 Paragraph (3) of section 274(e) is amended to read as
   
   
3. 3 follows:
   

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is an entity described in section 168(h)(2)(A), or

‘‘(ii) to any other arrangement des- ignated by the Secretary as having the ef- fect of avoiding the limitation under sub- paragraph (A).’’.

(d) 50 PERCENT LIMITATION ON MEALS AND EN- TERTAINMENT EXPENSES.—Subsection (n) of section 274 is amended to read as follows:

‘‘(n) LIMITATION ON CERTAIN EXPENSES.—
‘‘(1) IN GENERAL.—The amount allowable as a deduction under this chapter for any expense for food or beverages (pursuant to subsection (e)(1)) or business meals (pursuant to subsection (k)(1)) shall not exceed 50 percent of the amount of such expense or item which would (but for this paragraph) be al-

lowable as a deduction under this chapter.
‘‘(2) EXCEPTIONS.—Paragraph (1) shall not

apply to any expense if—
‘‘(A) such expense is described in para-

graph (2), (3), (6), (7), or (8) of subsection (e), ‘‘(B) in the case of an expense for food or beverages, such expense is excludable from the gross income of the recipient under section 132 by reason of subsection (e) thereof (relating to

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de minimis fringes) or under section 119 (relat-

ing to meals and lodging furnished for conven- ience of employer), or

‘‘(C) in the case of an employer who pays or reimburses moving expenses of an employee, such expenses are includible in the income of the employee under section 82.
‘‘(3) SPECIAL RULE FOR INDIVIDUALS SUBJECT

TO FEDERAL HOURS OF SERVICE.—In the case of any expenses for food or beverages consumed while away from home (within the meaning of section 162(a)(2)) by an individual during, or incident to, the period of duty subject to the hours of service limitations of the Department of Transportation, paragraph (1) shall be applied by substituting ‘80 percent’ for ‘50 percent’.’’.

(e) CONFORMING AMENDMENTS.— (1) Section 274(d) is amended—

(A) by striking paragraph (2) and redesig- nating paragraphs (3) and (4) as paragraphs (2) and (3), respectively, and

(B) in the flush material following para- graph (3) (as so redesignated)—

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1. 1 (i) by striking ‘‘, entertainment,
   
   
2. 2 amusement, recreation, or’’ in item (B),
   
   
3. 3 and
   
   
4. 4 (ii) by striking ‘‘(D) the business rela-
   
   
5. 5 tionship to the taxpayer of persons enter-
   
   
6. 6 tained, using the facility or property, or re-
   
   
7. 7 ceiving the gift’’ and inserting ‘‘(D) the
   
   
8. 8 business relationship to the taxpayer of the
   
   
9. 9 person receiving the benefit’’.
   
   
10. 10 (2) Section 274(e) is amended by striking para-
    
    
11. 11 graph (4) and redesignating paragraphs (5), (6),
    
    
12. 12 (7), (8), and (9) as paragraphs (4), (5), (6), (7),
    
    
13. 13 and (8), respectively.
    
    
14. 14 (3) Section 274(k)(2)(A) is amended by strik-
    
    
15. 15 ing ‘‘(4), (7), (8), or (9)’’ and inserting ‘‘(6), (7), or
    
    
16. 16 (8)’’.
    
    
17. 17 (4) Section 274 is amended by striking sub-
    
    
18. 18 section (l).
    
    
19. 19 (5) Section 274(m)(1)(B)(ii) is amended by
    
    
20. 20 striking ‘‘(4), (7), (8), or (9)’’ and inserting ‘‘(6),
    
    
21. 21 (7), or (8)’’.
    
    
22. 22 (f) EFFECTIVE DATE.—The amendments made by
    
    
23. 23 this section shall apply to amounts paid or incurred after
    
    
24. 24 December 31, 2017.
    
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What you said is not only incorrect ...it's absolute nonsense.

 

Well you throw something like that out there but you somehow can't find the words or just don't want to bother to explain just what you think is incorrect. That's what I find offensive.

I have been through an IRS audit since I started trucking and they had no problem with how I calculated per diem. They were a little iffy about the number of days I claimed but I had logs to back it up.

 

You are confusing two common M&IE structures..

A, paying an employee M&IE without adjusting wages. In this case, M&IE is a reimbursement and therefore does not influence income. Some O/O's use this structure.

B, paying an employee M&IE in lieu of wages. Here the employer substitutes M&IE for the wages, i.e. by paying 34 c a mile in stead of 45 cents a mile, plus M&IE. This structure, which is most commonly used, reduces income and substitutes reimbursed expenses (M&IE).

 

There is a lot of misinformation out there regarding per diem. I am getting calls daily for clarification. With the exception of a few posts, you all seem to have a pretty good grasp of what the new rules are. I can sum it up in a couple of points:

A. If you are an owner operator you can still claim the per diem deduction on your taxes through your corporation or through schedule C on your tax return. It is still subject to the 80% deductibility rule.

B. If you are a company driver that is not paid a per diem by the company you work for, you can no longer claim the number of days out on the road as an unreimbursed employee business expense that is claimed on form 2106 and carried through to your schedule A of itemized deductions.

C. If you are a company driver that is paid a per diem, rejoice you are claiming it and paying less taxes without an 80% limitation on deductibility.

I did not know this forum existed. Great to see everyone out here discussing these issues. I have been a CPA in the trucking industry for over 20 years. I was thinking that there had to be somebody out here blogging and discussing these issues. Good reading. Keep it up!!

Keep Truckin'

 

Yeppers, I just took the deduction on my 1120S.

 

Deleted replied to wrong post @Accidental Trucker

 

Within this thread are several links to articles posted in industry related media. More than one of those articles report that transportation workers were carved out or left alone as it relates to the per diem deductions. Did you read those articles?

Your post indicates otherwise. Can you please provide links or reference material which supports your position?

In theory, the industry sources I referenced are reputable. Although they may be mistaken, I would give them a benefit of the doubt that they would not deliberately provide false information and that they have done at least a reasonable amount of research to support their position.

I am not trying to stir anything up. I would just simply like to know the correct answer and have sources to reference. Thanks.

 

There are two types of transportation workers. The company driver and the owner operator. There was no carving out of any special industry groups from the removal of the deduction for employee business expenses. It is hard to reference sources when you have to know how the tax return preparation process works and where these deductions are being allowed and disallowed. For company drivers, the fact remains, you cannot deduct employee business expenses on your itemized deductions starting with the 2018 tax return. The per diem is considered an employee business expense. For the owner operator, you can take a business deduction for 80% of the per diem allowance for days away from your tax home on your business tax return or your schedule C whichever applies to you.

So the article in LandLine Magazine is correct in that the rules have not changed for the Owner Operator. The change is only to what the company driver that gets a W-2 is allowed to deduct on his/her schedule A of itemized deductions. Several may or may not be taking that deduction because they cannot itemize or the fact that the standard deduction doubles for single taxpayers from $6,000 to $12,000 and for married taxpayers $12,000 to $24,000.

I have seen no exceptions to this change. That does not mean that there will not be something that comes up down the road if enough people throw a fit. I certainly hope it gets changed. It makes no sense to me that potentially every driver that is single that goes to Church and tithes and has state income and property taxes would be over the new $12,000 standard deduction already but when you take the per diem out, they drop down below that, thus increasing their taxes.

The items that you are referencing as exceptions, you cannot read them without having read the whole section of the code in which that exception applies. The section that discusses exceptions was already in the tax code and was in the context of explaining a deduction for a company, not an individual. It was talking about the disallowance of entertainment expenses for businesses and an exception to the rule was travel expenses paid for by the company on behalf of the employee that was out of town for business reasons. Per diem is part of that section and it discusses the 80% deductibility of that for businesses. So when STexan above says that the old rules still hold, he is correct in that they hold for the owner operator that is running a business. But it does not hold true for the company driver that is an employee.

Go to this link: Go to page 237 and start reading from there. You will see that what this exception is referring to is exactly what I stated in the previous paragraph.

https://congress.gov/115/bills/hr1/BILLS-115hr1ih.pdf

I hope someone finds a loophole in there somewhere because I think a lot of company drivers are going to be negatively impacted by the loss of this deduction.

 

The loophole would be if you made truck drivers Statutory W2 employees. That way they can file schedule C.