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May 18, 2019
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Restoring Per Diem Deductions for Company Drivers

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The Tax Fairness For Workers Bill Has Been Filed To Reestablish Per Diem Deductions

The Potential Restoration of Tax Deduction Benefits

The restoration of your per diem tax benefits has become possible due to a bill in the Senate and the House. Tax cuts in 2017 eliminated these benefits if you are a company driver. The truck driving industry has lost as much as thousands of tax liability dollars per year. Pennsylvania Democrats Representative Conor Lamb and Senator Bob Casey introduced the bill along with thirteen Democratic co-sponsors. The Tax Fairness for Workers bill would enable you to make deductions on your yearly tax bill. The deductions were lost to the drivers as of their 2018 tax filings. These deductions are only permissible if you do not receive reimbursement. The annual deduction for a driver working five days per week is $13,728 per year. This can save you as much as $1,300 every year. Visit https://www.truckersnews.com/bills-would-restore-per-diem-deductions-for-company-drivers/ for additional details.

Traveling Business Taxpayers

The changes also impact you if you are traveling away from your home after October 1st of 2018. The IRS allows the per day or per diem rates to enable both employees and employers to be compensated for business traveling expenses including daily expenses, lodging, and meals. This compensation is not included in your wages when you are filing taxes. You cannot exceed the federal rate per day, and an expense report must be available. This means you are no longer able to deduct your traveling expenses when you are not reimbursed from 2018 until 2025. According to the IRS, this excludes the Armed Forces reserves for the United States and local and state officials from the government. This is provided they meet specific qualifications. Please visit https://www.forbes.com/sites/kellyphillipserb/2018/09/26/irs-announces-new-per-diem-rates-for-taxpayers-who-travel-for-business-but-watch-out-for-tax-law-changes/#2451eb482781 for full details.

The Filing of the Bill

The bill has been filed with the Finance Committee for the Senate and the Ways and Means Committee for the House. Business expenses can still be filed by taxpayers filing as self-employed. This is not as useful for the truck driving sector because the only available deduction is for the cost of meals.Exact numbers must be provided and quality records kept for you to qualify for the deduction. A few mobile apps, such as the automated bookkeeping and accounting app DUKE.AI, are available to help you maintain quality records. The per day rates for incidental expenses and special meals starting October 1st of 2018 include:

  • Traveling within the continental United States, $66
  • Traveling outside the continental United States, $71
  • Dry cleaning
  • Room service
  • Fees and tips for services including luggage handlers and food servers
  • All meals
  • Laundry
  • Incidental expenses including hotel staff and lodging, $5 per day

Claiming Expenses

If you were able to claim these expenses in the past, your best solution is to talk to your employer about reimbursements. A lot of employers are not willing to risk losing a valuable employee because of a few dollars and will offer to reimburse you for these expenses. It is important to note specific destinations have special rates due to the differences in cost. High-cost locations offer you a daily travel rate of $287. If the site is in the continental United States, your per day rate is $195. These destinations also provide $70 for incidental expenses and meals — Visit forbes.com for additional information.

The Federal Allowance

The bill would enable you to deduct eighty percent of your daily federal allowance from your yearly taxes. The current allowance is $66 per day. It is essential to understand if you are already being reimbursed for your daily expenses, you cannot claim them when filing your taxes. There is a growing trend triggered by the changes made due to the Tax Cuts law of 2017. Numerous carriers are including the per day rate into the packages provided to their drivers. This means even if you are unable to use the per diem rate for a tax deduction on your income tax, you can still benefit from the rate. You will always be entitled to receive eighty percent of the daily rate established by the IRS because they are considered tax-free earnings.

The Potential Benefits

If the bill passes, you will be able to deduct $52.80 every year when you file your yearly income for each day you traveled away from your home for business. If you are married, you are entitled to a $24,00 deduction as opposed to the $13,728 for single filers. You must have deductions for an additional $10,272 to qualify for the $24,00 deduction. The bill would also enable you to deduct your union dues from your taxable income.

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Truck Driver Business
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