Every industry has different rates, and the trucking industry has a per diem meal rate set by the internal revenue service. This video explains how per diem works in the trucking industry. Tax bill likely sunsets meal per diem for drivers, cuts. Certain truck drivers can qualify for per diem deductions, or those associated with lodging excluding taxes, meals and incidental expenses. Klr irs updates 2016 per diem rates for business travel. Increases are given once a driver proves themselves. Per diem rate schedules of amounts considered reasonable are set out in tax determinations published by the tax office annually. Truck driver per diem prodigy financial services group. The per diem when someone is traveling outside of the u. Irs increased per diem rates effective october 1, 2018. Reasonable allowances received in accordance with atos reasonable travel allowances schedules are not required to be declared as income, and can be excluded from the expense substantiation requirements. For truck drivers, the irs allows you to claim a per diem meal expense for. Mar 31, 2018 per diem rates for truck drivers is allowable 80% or 50% of the rate.
You are a longhaul truck driver if you are an employee whose main duty of employment is transporting goods by. Fy 2017 per diem rates apply from october 2016 september 2017. Understanding per diem pay for truck drivers cdl knowledge. Tax reform eliminated per diem for employee truck drivers those who get an annual w2 wage statement from their employers. Basically, the per diem rates are looked up using the location and date of each layover. For instance, the standard per diem rate set up by the irs for meals is. The irs has announced per diem rates for truck drivers and other transportation workers. Rates are set by fiscal year, effective october 1 each year. The per diem rates shown on this page are averages of all of the individual per diem rates within each state as of 2016. For years, truck drivers have collected a per diem for meals when on the road. The trucker per diem tax deduction is one of the largest tax deductions available for truck drivers. Truck driver per diem tax break landstar independent. Per diem and other truck driver tax deductions the. The per diem rates shown on this page are averages of all of the individual per diem.
For details we turned to trucker taxes expert, tara thompson. Per diem is a portion of salary paid to the truck driver taxfree. A trucker can deduct 80% of per diem on their income tax return. Drivers who start and end a trip at home on the same dot hos 14hour work day cannot claim per diem. Whether you were a company driver or owneroperator, you could. Sep 29, 2015 the irs has recently updated the per diem rates for business travel which will begin october 1, 2015 the start of fiscal year 2016. Truck driver per diem tax break landstar independent trucking. In addition to all three meals, the per diem is intended to cover incidental expenses like tips and transport to and from the place of business and hotel. However, since were talking about a work field that often times leave the border, we have to mention the per diem for that as well. The irs considers a semi truck to be a qualified nonpersonaluse vehicle. Tax reform facts impacting 2020 truck driver per diem pay.
Sep 25, 2015 beginning october 1, 2015, truck drivers will see a small pump in per diem pay. Perdiem rate for truckers, owneroperator independent drivers. Being a truck driver, especially for new overtheroad drivers, can be like learning a whole new way of life. How tax reform changes and doesnt change per diems for. This information is published in irs publication 463 and establishes the limits for daily meal deductions that truck drivers can take. Per diem can only be taken when the driver spends the night away from home. Both company drivers and owneroperators can claim per diem. Purpose this annual notice provides the 2016 2017 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home, specifically 1 the special transportation. The irs has recently updated the per diem rates for business travel which will begin october 1, 2015 the start of fiscal year 2016. I prepared a ccorp trucking company income tax return for 2015 and 2016 they paid their employee drivers per diem for days away all the records are good but the irs says i should have only deducted 8. The per diem amount you will be issued for meals and lodging depends on the location to which you are traveling.
The per diem rates in lieu of the rates described in notice 201457. Per diem covers part of the cost for meals and incidentals a driver purchases while spending the night away from home on business. Tax reform eliminated per diem for employee truck drivers. Tax reform help truckers and carriers, but per diem takes a. Trucker per diem rules simply explained per diem plus. Drivers that fall into those two categories, including drivers in parttime work configurations, in training or with daily rate compensation, are not eligible for the schneider per diem program. Remember, as a company driver, these deductions are only available if you itemize and. Truck driver tax deductions may include any expenses that are ordinary and necessary to the business of being a truck driver. Bill in congress would restore drivers per diem tax deduction. Find current rates in the continental united states conus rates by searching below with city and state or zip code, or by clicking on the map, or use the new per diem tool to calculate trip allowances. Yet, confusion exists, which is only compounded as drivers file taxes for the first time under the new tax cuts and jobs act. One way that truck drivers can offset some of their earnings and receive a tax deduction is to use the per diem allowance established by the internal revenue service. What is the max amount of per diem for an otr truck driver. The trucking industry is in a bit of a frenzy over tax reform and per diems, and.
There are almost 400 destinations across the united states for which a special per diem rate has been specified. A selfemployed truck driver s tax home may be at the headquarters where the trucking assignments are given out, even if that is far from where they live. Per irs publication 17 your federal income tax for individuals, page 180. Can someone tell me the 2016 irs per diem daily rate and make it clear if you are stating the 100% amount or the 80% amount. Meal and beverage expenses of longhaul truck drivers are deductible at a higher rate than the 50% permitted for other transportation employees. For truck drivers to have their per diem pay to be prepaid and not be. Per diem rates for truck drivers is allowable 80% or 50% of the rate. The per diem amount you will be issued for meals and lodging depends on the. Per diems are fixed amounts to be used for lodging, meals, and incidental expenses when traveling on official business. Keep reading to learn how the truck driver per diem affects your taxes a. How much per diem can i deduct on my income tax return. Feb 18, 2020 schneider is proud to continue offering a truck driver per diem pay program in 2019.
Truck driver per diem 2019 2020 per diem rates 2020. The phrase per diem deduction can also be a bit confusing because it sounds like per diem is being deducted. Jan 16, 2018 for years, truck drivers have collected a per diem for meals when on the road. Per diem rates rates are set by fiscal year, effective october 1 each year. It is referenced in irs publication 463 in the section that applies to travel away from home while working. That is because most people can only take 50% of the per diem.
In the last few weeks, there has been a lot of confusion in the driver community regarding the per diem, which has been. Lets look at a few cities to see how much is allowed. With rates inside out and risks on the road, many owneroperators choose to. Per diem for truck drivers lets you take a daily allowance for food and incidentals which is a fancy way of saying tips. Selfemployed truck drivers may also deduct 80% of the special standard meal allowance rate or their actual expenses. Starting in 2018 the per diem tax exemption for all company drivers has been eliminated. Truck driver per diem tax break the trucker per diem tax deduction is one of the largest tax deductions available for truck drivers. For a full schedule of per diem rates by destination broken down here by county, click on any of the states below. Both dos and gsa per diem rates are important to truck drivers because the irs allows taxpayers to use the per diem rates as an alternate method for accounting for their meals and incidentals expenses on the employee business expense portion of their taxes. The average truck driver is expected to travel between 2,000 and 3,000 miles per week, based on the 70 hour maximum hour restriction over eight days. The most notable change when becoming a truck driver is that you are constantly away from home and have to purchase all your meals on the road. It was updated on june 12, 2019 to reflect current per diem rates.
Oct 17, 2017 understanding per diem pay for truck drivers october 17, 2017 october 17, 2017 in the trucking industry, per diem pay is the reimbursement paid to the driver as part of the costs incurred for meals and other incidental expenses while on the job. If you are an employee driver, you are not eligible for per diem. Tax reform help truckers and carriers, but per diem takes. Taxes and deductions that may be considered ordinary and necessary depends upon. During eligible travel periods in 2019, meal and beverage expenses are deductible at 80%. Per diem is classified as a nontaxable reimbursement to an employee driver. For company drivers, per diem is an itemized deduction, and for owneroperators it is a total amount deducted on your schedule c tax return.
You can figure your meals expense using the actual cost, or use the standard meal allowance per diem. Meal expenses of longhaul truck drivers meal and beverage expenses of longhaul truck drivers are deductible at a higher rate than the 50% permitted for other transportation employees. Federal per diem rates are set by the general services administration gsa and are used by all government employees, as well as many privatesector employees. In order to take these deductions, you must itemize versus taking the standard deduction. A wellimplemented per diem program can be an effective tool to aid in driver retention, as well as increase profits for carriers and drivers. For travel to any other areas within the united states, the fy 2016 general per diem rates are used. You can use a special standard meal allowance if you work in the transportation industry. Additionally, you must be an over the road trucker who spends nights away from home. Here is the full chart of per diem rates for truck drivers in 2020.
With rates inside out and risks on the road, many owneroperators choose to sit. Irs issues 20162017 special perdiem rates for travel. Understanding per diem pay for truck drivers october 17, 2017 october 17, 2017 in the trucking industry, per diem pay is the reimbursement paid to the driver as part of the costs incurred for meals and other incidental expenses while on the job. Irs issues 20162017 special perdiem rates for travel journal of. A per diem is a rate given to employees or contractors to cover the daily expense of meals, lodging or another item. Most commonly, companies who use per diem pay will pay drivers a slightly lower cents per mile cpm rate, but a certain percentage of that pay will be included. Per diem plus will record 34 per diem when a driver departs their tax home before noon or returns to their tax home after noon. Only those people that fall into the category of special rates for transportation services which as a trucker, you would are allowed to claim 80% of the per diem. You can find the current per diem rates for the location to which you traveled at this link. The irs allows selfemployed drivers and owneroperators to deduct certain costs under the category of travel expenses. These include a per diem for meals, plus accommodations, tolls, and parking. Since the tax cuts and jobs act left per diem provisions intact for business owners and the selfemployed owneroperators and selfemployed truck drivers, rates are the same as last year.
The updated rates are effective for per diem allowances paid to any employee on or after oct. As you search for the best paying truck driving jobs, your top priority is to find the trucking company that will pay you the most money. If you are a company driver, make sure you do not receive an untaxed per diem allowance from your employer. It then goes on to give you some different rates for some cities. Being able to understand how to use this tax deduction properly can significantly reduce your income tax liability. Irs updates transportation industry per diem rates ksm blog.
Per diem rates for truck drivers is allowable 80% or 50% of. Click on any county for a detailed breakdown of the per diem rates applicable in that area, and a table of per diem rates by month for the entire year of 2016. Drivers that are just starting out can expect to see starting wages. Now you can claim more than the per diem rate, but you will need to track all your receipts and take 80% of that amount, but you have to use that method for every day that you are on the road for the year, so if you are spending below the standard rate for per diem, this method does not. The per diem rate for partial days is 75 percent of a full days rate. The per diem deduction uses conus and oconus per diem rates to come up with an allowable value for what a truck driver spends on meals and incidental expenses while on truckingrelated travel. Per diem rates allow companies to document business travel expenses without having to collect receipts, monthly expense reports, and other bothersome administrative paperwork. Purpose this annual notice provides the 20142015 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home, specifically 1 the special transportation. Jb hunt feb 2016 change in pay for regional intermodal drivers. This program provides a great opportunity for eligible drivers to maximize their takehome pay.
Earning a living as a trucker involves driving to and from your destination in order to deliver loads of everything from pencils to pickled peaches. When deducting per diem, it will reduce both taxable income and selfemployment tax. Perdiem rate for truckers, owneroperator independent. Truck drivers per diem for 2018 filing taxes for truckers. As a truck driver, you must claim your actual expenses for. Per diem rates for truck drivers is allowable 80% or 50%. Beginning october 1, 2015, truck drivers will see a small pump in per diem pay. Per diem can only be taken when the driver spends the night away. General services administration website for per diem rates.
1381 1529 1139 901 891 4 1109 1509 377 22 444 676 1314 1221 937 1049 1267 1314 1466 969 712 858 1155 736 781 658 680 1169 651 1041 580