You're looking at it all wrong.
You're looking at a deduction and an expense as the same thing when they are not.
I fill out a sch C but it isn't for running a business, it is to deduct those things I can deduct like my mileage on my pickup or my per diem when I go out of town.
Again in your situation, talk to an accountant, not a tax preparer.
LLC partnership and per diem
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Ridgeline, I think we are getting mixed up on wording, from the irs website,
What Can I Deduct?
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business.
So a business expense is something you deduct from the profit you make.
Also from irs.gov
Schedule C (Form 1040) Profit or Loss From Business
Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor.
I am asking advice for a OTR husband wife team that is looking to form an LLC, and where they claim their Per Diem, are you in this same situation? If not please stop muddying the waters for someone in my position, and others who are in a similar situation.
Ridgeline, No offense, but other then telling me to consult an accountant, I don’t know why you even responded to my question if you aren’t in a similiar situation, or are an accountant yourself. I thought posing a situational tax question in a forum for trucker taxes might get me some truckers in a similiar situation letting me know how they dealt with said problem.
I have tried to use irs definitions and publications, including specific line items on different schedules to help support/define my position, but you have ignored them completely.
I appreciate that you want to help, but unless you are an accountant, is it possible you assume too much? And you know what they say about assuming, right?
somecallmetim2 Thanks this.
I was thinking the same thing from his responses.
He might be a driver, but he definitely isn’t anyone with any tax knowledge and should stop saying stuff like “consult an accountant, they will tell you the same thing I have”!
I wonder why the hell are you even asking a stupid question like this then acting like every one is wrong when they give you an answer. I am not the only one who said the same thing, there are others who also know what the answer is.
If I or others post something we do so not always to help the original poster out but others who may have a similar situation or problem or didn't think about it.
In your case, you are asking something that isn't hard to figure out, it is easily solved by consulting a professional who can tell you exactly what you need to do in your situation.
But because you don't believe what we said, you think that you can tell us we are wrong after doing for years exactly what we said needs to be done.
For the record, I am a fleet owner which makes me a business owner, which also means because I have employees I have a responsibility not to jerk them around or risk their lively hood by being ignorant of the tax laws. I am not self-employed like you two nor am I a driver any more - I am officially retired from driving. I have a finance and IT background from both previous jobs and consulting in health care and other industries.
If you need more proof just to answer a simple question, then I guess you will have to live with not knowing because that's all I'm offering.cnsper Thanks this.
You are telling me you are a business owner, are you incorporated? S Corp, c Corp? Are you a single member llc? Are you a sole proprietor? These all have various ways of reporting business expenses, and yes HOS per diem is a business expense! You can’t claim HOS per diem if you don’t have a job. HOS per diem rules are calculated on you personally and your days away from home, but it is still a business expense. Yes you can claim HOS per diem on your personal taxes, but depending on how your business is organized (Corp, Scorp, llc) it might go on different forms as part of a personal tax return!
You say you put HOS perdiem on your schedule c but not for business, then you say you have a business, which is it? Then grab your last schedule c and tell me what the heading is? It should read something like
SCHEDULE C (Form 1040) Profit or Loss From Business (Sole Proprietorship). If I am wrong then please provide proof, as I have done using irs.gov information.
You state you aren’t self employed like me, please read the following from the irs.gov website
“ If you're self-employed, you can deduct travel expenses on Form 1040, Schedule C (PDF), Profit or Loss From Business (Sole Proprietorship), or Form 1040, Schedule C-EZ (PDF), Net Profit From Business (Sole Proprietorship)”
how are you using a schedule C if you aren’t self employed?
You are giving very contradictory information out.
I 100% believe you have done your taxes this way, as I also believe 100% that the IRS won’t tell you if you overpaid or didn’t minimize your tax liability.
The other 2 answers regarding my question had very different options, 1. Pay yourself as a W2 employee and have the company reimburse HOS per diem, then the company expenses it.
2. Partnership llc, split 50/50, goes on personal return but hasn’t stated what form yet,
Neither of the answers said schedule c.
I have also found a possible option using schedule E(1040) and having the HOS per diem expense entered as a “unreimbursed partner expense”, I am waiting for my tax attorney to get back to me on this, which I posted before you even joined this thread!
Once again I have laid out a very specific situation in which I am asking about, which in your own words you have said you aren’t in, maybe you should only answer questions like, “I am a fleet owner with employees, and would like to retire and troll trucker tax forums with information that doesn’t apply to the question being asked, is this possible?”cmrdev Thanks this.
I think apples and oranges are getting mixed.
If the company pays a per diem to an employee, it's a company expense..
The .. per diem.. in the trucking industry most drivers talk about, is a hotel and food, personal deduction. Not an expense of the company or paid by the company.
Some companies use the..per diem pay..to shift tax liability from the company to the driver.
A ..per diem..paid by the company can be any amount. $10-$1000 per day. Company writes it off as expense.. employee receives it as income... In turn the employee gets to file the ... per diem, hotel and food deduction.. according to the irs daily and location rates.
Not necessarily all the amount received from the company. The amount could be more.
Consult a tax accountant.Last edited: Dec 15, 2017
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