Rules for Per Diem

Discussion in 'Trucking Industry Regulations' started by OldTruckerGirl, Jan 26, 2021.

  1. ZVar

    ZVar Road Train Member

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    I just went and looked, and unless it changed again back in 2019 the tax laws changed. Unreimbursed business expenses (of which per diem is) are no longer allowed to be deducted by an employee, only self-employed can do that.

    Might want to look at How Tax Reform Changes (and Doesn’t Change) Per Diems for Truck Drivers and talk to your CPA about it.
     
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  3. OldTruckerGirl

    OldTruckerGirl Bobtail Member

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    Hi ZVar, thank you so much. I believe the article you linked was written prior to the IRS regulations from 2019 that so far is the most recent regulations I have found from the IRS. As I understand you are correct that the employee can no longer take that deduction at the end of the year however they can take the per diem allowance through the year.

    Does anyone know what the most recent date is for the IRS regulations? The one I have from 2019 may or may not be the most recent. Worst case scenario is that I call the IRS which is something I have to do on a regular basis for various things however it is never pleasant. I'd rather poke myself in the eye than be on hold for an hour wondering if a helpful or hateful person picks up!
     
  4. ZVar

    ZVar Road Train Member

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    Actually it was written to inform about the 2019 changes.
     
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  5. Accidental Trucker

    Accidental Trucker Road Train Member

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    @ZVar, you are correct in the statements that employees can no longer deduct non-reimbursed employee expenses.

    however, as an employer I am perfectly legal to pay my employees a daily stipend to reimburse them for their daily expenses. Such a payment is a reimbursement of expenses, and therefore not wages. And, happily, fully deductible as a business expense.

    Now, because I am so generous, it is also true that employees are willing to work for me for a lower daily wage. Essentially, the employee receives less compensation in wages, reducing things like payroll taxes and income taxes, which makes them happy. Taxes go down, but their total compensation remains equal (everybody’s “plan” is different, but that’s the general idea).

    now, as an employer, I also save on payroll tax, work comp, 401K matches, etc, so I am very happy to offer this option to the drivers at no cost to them.
     
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  6. OldTruckerGirl

    OldTruckerGirl Bobtail Member

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    Do you mind sharing how much you reimburse per day and for the partial departure and return day? I understand if you do not want to. To me it looks like the daily amount is $66 and the partial days are $49.50 for our OTR drivers only.
     
  7. Accidental Trucker

    Accidental Trucker Road Train Member

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    We pay the full payment allowed by the IRS, i.e. 80% of $66, and 75% of 80% of $66 for partials. I forget what the Canadian rate is, but it's a little higher.

    All it is, is a game of "hide the pea under the shell", but I am a firm believer in keeping the Government away from my money as much as legally possible.
     
  8. Farmtractor9900

    Farmtractor9900 Light Load Member

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    – Canada Revenue Agency (CRA) has changed the rate at which drivers can claim meal expenses using the simplified method from 80% of $17 to $23 per meal.

    The changes are retroactive to Jan. 1, 2020.
     
  9. sevenmph

    sevenmph Road Train Member

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    October 1st 2020 was the latest changes to per diem. There is a good article in Forbes explaining the changes.
    Also a few years ago I remember the IRS had rules as to who qualifies for per diem. I don't know if they are still valid, but it had to do with having a physical address that the per diem recipient pays at least a portion of the bills.
     
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