The transportation workers’ special standard per diem rate has been increased to $66. Outside continental U.S increased from $68 to $71 per day.
That means truckers can continue to declare a $66 per diem dating back to Oct. 1, 2018, when the 2019 per diem rates became effective.
Some truckers are unsure when they can use the “overnight” rule and deduct the per diem amount. In past issues of Land Line Magazine, Howard Abrams of PBS Tax and Bookkeeping Service included the following Q&A on the topic in his “Tax Tips” column.
Q: I’m not sure when I can deduct expenses for meals and lodging under the “overnight” rule. Is there a general rule of thumb?
A: The per diem is available for IRS Schedule C filers, which is owner-operators. Company drivers who file an IRS Schedule A, are not eligible for the deduction.
In order to deduct your travel expenses, you, as the taxpayer, must be away from your home residence or tax home longer than what would constitute your ordinary workday. You must be away from your home long enough that you cannot complete the trip without sufficient sleep or rest.
The rest period must be long enough to require adequate lodging, such as an overnight stay at a motel or in your truck. A short duration of rest, such as a quick nap at a rest stop, does not qualify your travel expenses as deductions because it does not satisfy the overnight rule.
However, it is not necessary that you, as the taxpayer, be away for more than 24 hours in order to meet the overnight rule.
An example of meeting the overnight rule would be if you were traveling on business and you rent a room to sleep or rest during a layover. An example of not meeting the overnight rule would be if you were traveling several hundred miles and needed to stop to rest for an hour.
If you have no regular place of business and you do not maintain a fixed home, you may not deduct any travel expenses. A trucker who lives in his or her truck during the entire course of the year cannot deduct per diem meals.
Abrams also cautioned that truckers could encounter problems related to their expenses and per diem payments, depending on how their carriers handle their business. Per diem payments are subject to income and employment tax if a carrier reimburses a trucker in excess of the federal per diem rate, which is $66 per day. This is so if the trucker is not being reimbursed for actual expenses.
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