Will we lose per diem

The tax reform bill likely to be signed into law by President Trump this week or next is expected to be the end of the daily $63 per diem deduction allotted to truck drivers for on-road meal expenses, says ATBS president and CEO Todd Amen. However, he and his firm are still reviewing the details of the bill, he says, and expect to be able to speak more authoritatively in the new year about the changes it institutes.

 

The axing of the per diem by Congress’ overhaul of the U.S. tax system, as with changes in other itemized deductions, is intended to be offset by a big bump in the standard deduction granted to all filers. That will increase to $24,000 from the previous $12,000 for married couples filing jointly.

“There is no need to itemize” the per diem deductions after the bump, says Amen, “because they’d still probably be below the standard deduction.” The standard deduction for single filers will jump from $6,300 to $12,000. What’s more, the child tax credit – an amount subtracted directly from parents’ tax bills, not their taxable income —

 

My understanding is that you can still itemize actual amounts under schedule C. He was just theorizing that we wouldn't need to because of the standard deduction increase. And yes, he's wrong, at least in my case. So if you were spending less than $63 per day on meals, laundry, etc. then you will get a smaller deduction, and if you were spending more then you will get a bigger deduction. As for paying more or less total tax, keep in mind the bracket rates are going down.

 

Schedule c is for sole proprietor, don't think I can file it as a company driver.

 

No, you can't.

 

In effect it means more paperwork. Gotta start keeping all those #### meal receipts now.

 

Which means 2/3rds of truck drivers will lose a $12,000 a year deduction.

 

If I'm understanding it right they'll lose whatever their per diem was ($63 x days-on-duty) plus all their other deductions (tools, radios, phone, parking, etc.) plus the old standard deduction ($6350 single/$12700 separate/$9300 joint) minus the new standard deduction ($12k single/$24K married). On the plus side, these are just the means of calculating how much income will be taxed. The actual tax rates are going down so an individual could theoretically lose a lot of deductions and still pay the same tax. Clearly that's not going to be the case for drivers who stay out three hundred or more days a year though (300 x 63 = 18900).

 

As I do the math I'm going to be paying in $300 to $3,000 (not sure yet how cap gains and rental income will be treated) in Federal taxes.

For most company drivers this tax bill will not significantly reduce their tax bill.

 

Company driver here, making around 55-60K/yr. My tax guy emailed me this morning. He estimates that I'm gonna pay around $2,000 more in taxes next year due to losing the various deductions. He also advised if I had any deductible purchases I was saving till next year I should do them before the end of the year, which means I'll probably be buying some stuff before the 1st.

But hey, at least I can deduct the expenses on my private jet, right?