Company Driver & Tax Time

I have the facts to backup my position. I am required by my license and the IRS to always offer the proper advice. I have been enrolled to practice before the IRS for over 20 years.

If you don't believe me, call the IRS and ask them.

 

whatever. i am not gonna sit here and argue something so little and insignificant as this issue. you do your thing and i'll do mine. have a good day.

 

Well,I see roadmedic and jackfrost aren't getting anywhere.
Jackfrost,You are right that you can write off unreimbursed per diem expenses.But to others, this is only if you itemize on your tax return and do not exceed the federal per diem expense rate.Like others have said,keep your reciepts.If you exceed the federal rate per day you'll need to show proof on why your expenses were more than the guidelines.It doesn't mean they will be denied,just a red flag for an audit.As far as Roadmedic is concerned,I think you misunderstood his reply.If you don't believe your itemized deductions are going to exceed your standard deduction or if you don't want the headaches of itemizing,just stick to the standard deduction.I was an owner/operator for 7 years,this post only applies to what a company driver might wish to dwner/operator,self-employed falls under a whole differrent catagory.

 

A comment concerning standard deduction versus itemized deduction is different from not being able to take the unreimbursed per diems as you state. The terminology of the standard deduction is what triggered my comments. If in fact he is indeed referring to the unreimbursed items, then actually we are in agreement.

 

Hey all,

I was just reading what everyone has been saying and I am a little bit confused by everything. Some people seem to be saying that if you are getting per diem then you can not or should not take the standard deduction while others seem to be saying that you can or that you should take the standard deduction while at the same time claiming the per diem.

This has me a little confused as to what it actually is and it also leaves me to wonder as to what the deduction rate is for both standard and per diem for company drivers. I am just curious because I am a little behind on my taxes and I need to get them caught up just as quickly as possible and I need to have the right information so that I can make sure that I am claiming the right deductions and so forth.

I have been a company driver for over 5 years most of it has been OTR. The only time that I was not OTR was when I was working for Werner Enterprises (which sucks by the way) running their Albuquerque to Amarillo run Monday through Friday at night and I was supposed to be home during the days and off on the weekends with Werner. Unfortunately Werner quite often sent me home or turned me around halfway to Amarillo telling me that their was either no freight or no one to meet me on the other end. As a result I got tired of that racket and went on to try a couple of other companies because I was not making any money with Werner.

I only worked for Werner from May 2006 to November 2006 and I don't know what the tax laws are surrounding that shuttle run job. One person that I knew told me that if you claim the per diem or the standard deduction, then it would be wise to have copies of all of your logs. I'm not sure if that is true or not, but I certainly would like to find out as I would like to make sure that I am doing everything correctly.

I am also kind of wondering if it is necessary to send in copies of your logs and receipts at the time of filing when you do file using either or both deductions, but I am not quite sure about this and I am hoping that maybe someone out there might be able to provide me with some direction as to how to do this properly so that I can make sure that it is all correct ahead of time and that I have all of the proper documentation both before I file and after I file.

If anyone can help me to understand this better, then I would greatly appreciate it as it is important that i get myself caught up with all of this just as soon as I possibly can.


Robert.

 

The daily per diem allowance is currently $52.00 per day for the continental US. 80% of that figure is what you can deduct each day provided you were AWAY from your tax home and took a "rest period" before returning.

If you were on a shuttle run and got home daily then you CANNOT legally claim the per diem pay. The per diem is for drivers "duplicating" expenses while away from their home. The Per diem is for food, beverages, and tips.

Any other purchases for the job would be listed as "unreimbursed expenses." The key to the unreimbursed expenses is that your employer refused to compensate you for the "customary and necessary" item you purchased. If on the other hand you simply elected not to send the receipt in for re-imbursement and your employer would have refunded your money then technically that itemized item could be disallowed in an audit. An example of this would be US postage or fed-ex fees. These are normally re-imbursed by your employer and you should send them in to get 100% your money back from the company.

As for taking the daily per diem and itemizing or simply taking the standard deduction it is exactly that; one or the other.

If you are an OTR driver chances are you will be spending the majority of the time away from your tax home and itemizing will be your best bet. A driver that spends 300 days away from his tax home will be able to claim a $12,480.00 deduction ($52.00x300x80%).

If you are unsure of what is deductible and what is not you may want to seriously consider hiring a CPA that specializes in truck driver returns to prepare your tax returns and make sure you get all the deductions you are leaglly entitled to. The box stores like HR Block or Jackson Hewett are not normally up to speed on the specifics of the trucking industry.

No it is not necessary to forward your logs to the IRS or even your tax preparer for that matter (unless he/she specifically requests them but DO send any other receipts you have to your tac preparer). Simply count up the number of days you were away from your tax home and that is the number they will work from. For calculating partial days there are a number of acceptable formulaes currently in use. The key is to pick 1 and use it throughout that tax year.
First method (I have used this 1 for years) is to divide the day into 4 quarters and then look at the log book and decide how much of the day I was "away" from home. The partial days are all added up with the whole days.
The second method is claiming .75% or 3/4 of a day for every partial day on the road. The 3rd way is to simply claim every "partial day" as a whole day and keep it simple. This latest method was derived from the Drivers Daily Log site and also discussed on Sirius satellite radio.

 

Can you suggest someone that is in the Albuquerque, New Mexico that knows about that stuff that I can talk to about it all?

 

use your yellow pages my friend reputable tax professionals work all year long since the self employed have to pay quarterly taxes and all. i also found that coming in with a written list of your deductions in categorizes ie. gps programs that i purchased for what ever reason (last year it was three on for the gps button a second because the first wasnt compatible with the software i wanted to use and the last one was an upgrade) sheets for the truck (lets face i dont know many that have extra long twin or a regular twin bed at home) gloves, toll recites because i wasnt authorized to run it or didnt mach the log book near enough cell phone (all though your only allowed to claim a portion of it even though its a duplicate expence while away from home) doing that saves your tax preparer time and then in turn you money when it comes time to pay your bill

 

Stay away from franchises like H&R Block . They can not represent you if you are brought to court or audited . Use a tax preparer that is an enrolled agent or CPA

 

There are many tax preparers out there. You do not necessarily need one in your home state to prepare your taxes. There are some organizations and preparers that offer their services to anyone in the USA. There is a fellow named John Turner based out of Houston Tx that is a regular guest on Sirius radio channel 147. He sounds extremely knowledgeable and answers all kinds of tax questions from drivers who call in. I have no idea what his fees are but you can look him up on the net. There is another lady that seems very knowledgeable as well that I have been corrosponding with in Virginia. Her name is Linda Ebsen and apparently worked for the IRS for several years before going on her own. I believe you can find her online at rkms tax service.