LLC partnership and per diem

Discussion in 'Trucker Taxes and Truck Financing' started by somecallmetim2, Dec 12, 2017.

  1. somecallmetim2

    somecallmetim2 Bobtail Member

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    My wife and I are team drivers and currently report our Per Diem on schedule C’s.
    We are going to be buying our own truck and will setup a LLC as a partnership and use form 1065(K1)
    I believe this will eliminate the need for a schedule C, but I am confused where we then deduct the Per Diem for both of us.
    I am also checking with my tax guy, but would like to hear from people who are doing this now.
    Thanks
     
  2. xsetra

    xsetra Road Train Member

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    Will you be filing a corporate return?
    Your per diem goes on your personal return.
     
  3. somecallmetim2

    somecallmetim2 Bobtail Member

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    Currently we put Per Diem on schedule C which is profit/loss from a business that is filed with our personal tax return. With the formation of the llc and the use of the K1 partnership form for the business, that eliminates the need for a schedule c.
    Is the Per Diem for both drivers just deducted from expenses on the K1?
    This would seem to be the simplest answer except that we are talking about the IRS :)
    Thanks
     
  4. Accidental Trucker

    Accidental Trucker Road Train Member

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    Will you be employees of the LLC? If so, it's cleanest for the LLC to issue you a per diem reimbursement check, and it will be a business expense (labor).
     
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  5. somecallmetim2

    somecallmetim2 Bobtail Member

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    We will not be W2 employees, but partners of the llc where all profits after expenses will be “passed thru” to our 1040, line 17, income from a partnership.
    I’d also like to hear if anyone in a similar situation does it differently, while using an LLC.
     
  6. somecallmetim2

    somecallmetim2 Bobtail Member

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    I think I may have found it, buts still waiting for my tax guy’s response.
    Possibly entered on schedule E, line 27, as a unreimbursed partnership expense.
    Would still love a response from someone who uses this method.
    Thanks
     
  7. Ridgeline

    Ridgeline Road Train Member

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    Per Diem is a personal deduction, not a "business" expense.

    It is the same as taking a mileage deduction.

    You take it off your personal return.

    If you are filing jointly, and have a limited partnership in any form, it is best you get a good accountant who can tell you exactly what to do in order to do it right instead of taking advice from trucker.
     
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  8. somecallmetim2

    somecallmetim2 Bobtail Member

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    I appreciate the answers but Per Diem is not a personal expense (see publication 535 referenced above) It should be entered on your schedule C for running a business. This reduces your business income, you should not be putting this on a schedule a and itemize it as a personal expense. This has not been done on the last 4 years that I have used professional tax preparers. Furthermore, if it’s personal how do large companies expense it, when they pay their drivers Per Diem?

    I am asking other truckers (husband/wife OTR team drivers, who are O/O’s and have formed a partnership LLC) what they might be doing in the same situation for taking the DOT standard per Diem so I can look at the options ahead of waiting for what my tax attorney suggests.

    Thanks for the input!
     
  9. loudtom

    loudtom Medium Load Member

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    We have a partnership LLC, split 50/50. We do per diem on our personal returns. We've been together 17 years, not married, file separately.
     
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