Will we lose per diem

That is correct. It is not retroactive. It does not effect the 2017 tax returns.

 

https://congress.gov/115/bills/hr1/BILLS-115hr1ih.pdf

Note the "carve out" noted around page 242, line 8 and you may need to begin earlier in the text to get the context of this part. The way I read it, they are not "striking" any of the language pertaining to meal allowance deduction for those in the transportation industry, and in fact are reiterating the 80% as opposed to 50%

 

I assume you are referring to this post. I referred to this in a previous post. This is NOT as it pertains to employee business expenses that are deductible on a employees tax return as an itemized deduction which is where you are deducting your number of days away from your tax home. This section is referring to the deductibility for a Business that basically pays the per diem to you. This applies to the company you work for and to an owner operator that has his own company.

 

Is schedule A going completely away?

 

Look at page 3 of your attachment. Your section 3307 that you are referencing is under Title III-Business Tax Reform. This is not where an individual deducts per diem. As said earlier it is where Businesses deduct per diem. Now look at section 1312 on page 134. I will quote because this section means that the 2106 employee business expenses are no longer deductible effective with the 2018 tax return. This is what that means. Why? Because this is where you as an employee deduct your per diem on your tax return.

Sec. 262A Expenses Attributable to Being an Employee

(a) In General - Except as otherwise provided in this section, no deduction shall be allowed with respect to any trade or business of the taxpayer which consists of the performance of services by the taxpayer as an employee.

 

Never mind, I looked it up.

Not entirely...

 

No it is not. Just the section for Employee Business expenses and those expenses that are subject to the 2% floor. The state income tax, real estate and property tax deductibility is being limited to $10,000. Also mortgage interest is limited in the deductibility based on the value of the loan you have but most of us will not have to worry about that limitation.

 

In one of your previous posts, you said that you hope this does not remain this way. From your professional experience and in your opinion, what do you think the likelihood is that it may change prior to us filing our 2018 taxes in 2019? And also, what would bring about such a change? Is this something that industry associations and trade groups should be lobbying regarding? What is the right approach?

 

My gut tells me it is not going to change. I am not sure what Washington was thinking when they decided to remove this deduction. Maybe it was an area of abuse where people were deducting a bunch of expenses that would be considered personal expenses, etc. The first and quickest step that you could take is approaching the Company that you work for and asking them about implementing a per diem program, if they are not already doing so. This reduces your taxable income by the amount of the per diem and reduces the taxes that they deduct from your paycheck. Not only that, you are not limited by this being 80% deductible and subjected to a 2% floor like it is on your schedule A itemized deductions which is not allowed anyway in 2018. Not only that, it saves money for the company that you work for. Not only in payroll taxes but also in work comp premium payments. I know someone is going to comment out here that it reduces your gross wages which is reported to the social security administration which could lower your SS benefits in the future. Well that is true, however, I would suggest you take that savings you are getting on your taxes and invest it yourself with a personal financial planner. The next step would be to contact your local trucking association and see what they are doing on this front. It has been my experience that the trucking associations do not pay much attention to income taxes, only fuel taxes, IFTA taxes, HWY use taxes, etc. I hope that answers your questions.

 

I posted a reply but forgot to use reply sorry.