Are Lumper Fees Tax-Deductible?

Lumper fee is deductible, but reimbursement is taxable income. Washes out in the end.

 

Yes for O/O, no for company driver... No longer a form for unreimbursed employee expenses.

 

You was reimbursed, so no. It’s not an expense because you got your money back.

 

I don’t like using the term deductible to describe it. When you pay a lumper fee, it is a business expense that reduces net income; so yes, it is “deductible.” You then receive a final amount of income that reflects the reimbursement from the broker. Like the other guy said, it’s a wash. Any expense you incur reduces net income, these are not deductions or write offs, that is confusing terms that apply to personal taxes with business taxes and it gets a lot of guys in trouble.

 

You also want to make sure you know whether or not the broker 1099s you. A lot of brokers will 1099 you but somehow forget to get you the form. If you deal with a lot of them, ask the IRS for your tax transcript in February before you file:

Get Transcript | Internal Revenue Service

 

Thanks for advice