Tax Help - "On The Road Again, Just Can't Wait......"

Most long haul truckers are aware of the per diem deduction for meals and entertainment. But for those who are not and have not been taking full advantage of this deduction, take a look at the rates and do the math. This is a stellar way of reducing your tax liability.

First, you need to remember that any per diem amount can be highly scrutinized by the IRS. Therefore, keep those log book records.....this is the best proof of a per diem deduction. Also remember that you have to be a "long haul trucker" (on the road for over 12 hours per day).

Publication 1542 is your bible for this deduction and the Tables referred to below are located in this publication (it's too large to print here).

The Two Substantiation Methods

The tables in this publication reflect the high-low substantiation method and the regular federal per diem rate method.

High-low method. The first two tables in this publication list the localities that are treated under the high-low substantiation method as high-cost localities for all or part of the year.

Table 1 lists the localities that are eligible for $246 ($58 meals and incidental expenses (M&IE)) per diem, effective October 1, 2006. For travel on or after October 1, 2006, all other localities within CONUS are eligible for $148 ($45 M&IE) per diem under the high-low method.

Table 2 lists the localities that are eligible for $237 ($58 M&IE) per diem, effective October 1, 2007. For travel on or after October 1, 2007, the per diem for all other localities increases to $152 ($45 M&IE).

Regular federal per diem rate method.

Tables 3 and 4 give the regular federal per diem rates published by the General Services Administration (GSA). Both tables include the separate rate for meals and incidental expenses (M&IE) for each locality. The rates listed in Table 3 are effective October 1, 2006; those in Table 4 are effective October 1, 2007. The standard rate for all locations within CONUS not specifically listed in Table 3 is $99 ($60 for lodging and $39 for M&IE). For Table 4, this rate is $109 ($70 for lodging and $39 for M&IE).

Now let me give you an example of how great a deduction this can be.

250 days on the road driving coast to coast and hitting all the major cities (New York, Chicago, St. Louis, Dallas, Los Angeles) qualifies for the $58.00 per day rate:

250 day X $58.00 = $14,500 x 75% = $10,875 deduction amount
(receive 75% since you are covered under DOT regulations)

And the best part of it all is that you don't need to keep meal receipts.........those log books are your golden ticket!

If you haven't used this deduction in the past and are eligible, pull out those returns and starting amending. You might just be seeing Uncle Sam giving you more of those hard earned dollars back. Can't beat that with a stick................

More facts and figures for your deducting pleasure:

Publication 1542: Per Diem Rates
Standard Meal Allowances
Trucking Industry Overview: History of Trucking
Trucking Industry: Government Regulatory Requirements