What is Per Diem?
According to dictionary.com:
Per Diem - An allowance or payment made for each day.
So we know what Per Diem means, but what is Per Diem and how does it apply to the transport industry?
Per Diem is simply reimbursing drivers for meals and incidental expenses incurred while working away from home, but it is complicated by the tax laws. The IRS has created special Per Diem rules for the transportation industry that differ from regular business rules.
Who can Claim Per Diem?
To qualify to receive a tax deduction on a per diem basis, you must first be able to meet the requirements established by the Internal Revenue Service.
In general, you must be a transportation worker whose job requires that you be away from home on a regular basis. Furthermore, you must be away from home longer than a normal day's work. In other words, truck drivers who start and end their day where they live are not generally eligible for a per diem deduction. The IRS instead requires that your job requires that you sleep away from home for a substantial period of time.
What is the rate for truckers?
OOIDA keeps a regularly updated rate, here: http://www.ooida.com/EducationTools/Resources/per-diem-rate.asp
What are allowances?
The IRS specifies a scale of per diem allowances that a truck driver can deduct from his taxable income, thus reducing his amount of tax liability. These can be taken when his company does not provide its own standard per diem allowance. Publication 463 indicates that the standard per diem meal allowance is $46 per day, as of 2010, for most small communities. More money is allowed in other metro locations throughout the country. This information is listed in Publication 1542. If he so chooses, a truck driver can take a per diem deduction for meals and all incidental expenses as one expense, rather than itemizing them. Effective October 1, 2010, the IRS set the standard per diem rate at $233 for all qualified high-cost locations and $160 for all other locations.
What about Partial Days?
Truckers who decide to take the per diem deduction for meals alone must prorate the deduction for the days in which they are not gone for a 24-hour period. Generally, the prorated amount is three-fourths of the standard allowance on the day that the trucker departs from his home or place of work. The day he returns is not counted in the per diem deduction. Instead, the same three-fourths rule is applied to the day before he returns home.
The IRS has requested that drivers who claim Per Diem start maintaining their log book records for a year as proof of their working away from home (there have been a number of audits in 2014 regarding this). As a driver you need to save these log book pages, because Trucking companies only maintain them for about 6 months.
I would recommend digitizing them onto a computer and making sure you have a back up copy either online, or on an external drive of some kind.
My personal favorite method for drivers would be to invest in an efax account and fax copies of your log book to your self. Efax stores them online so they can be safely downloaded as a pdf whenever you get home.
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