PDP For Fleets - 3 Months Free
Other Taxes:
State Income or Sales Taxes, Real & Personal Property Taxes
Real Estate:
Mortgage Interest, Mortgage Insurance (PMI) [if qualified on F1098]
Per Diem:
Daily meals & incidental expenses allowance
Lodging:
Unreimbursed Hotel Expenses
Communications Devices/Fees:
Cellular/wireless fees paid, Access Fees (i.e.: Internet, Satellite radio (XM-Sirius) and Television for road conditions, weather, “heads-up” detour announcements, and other safety and security purposes)
“Lot Lizard Repellents” and Criminal Behavior Deterrents:
Alarms & Sirens, Illumination Devices (lights), Surveillance (audio-visual) Systems
Safety & Security Devices:
GPS Systems & Updates, Air Fans, Boots (steel-toed), Boots (hazmat or rubber), ”Bungee” Cords/Tie Downs, Cab Curtains, Duct Tape, Flags & Flares, Flashlights & Batteries, Hardhat & Hazmat Devices, Jack Straps, Load Chains & Locks
Administrative Dues & Subscriptions:
OOIDA, Per Diem Plus
Clerical Operations:
Briefcase, Calculator, Computer Accessories, Copies/Reproduction of Documents, E-Mailing Fees, Faxing Fees Paid, Postage & Shipping
Regulatory Licensing & Costs:
Access Card/Permit Fees (i.e.: Includes access costs to military bases, shipping ports, etc.), CDL Licensing-Related Costs/Fees, DOT Physicals Fees & Costs, Log Books (paper & covers), Log Book-Related Software, Scales & Weighing Fees, Tolls
“Supplies” Categories (Personal Hygiene Supplies on Tractor):
Bed rolls. pillows & sheets, Cleaning & Sanitation Supplies, First Aid Kit & Accessories, Laundry Bag & Detergent
The above is provide for informational purposes and should not be construed as rendering tax advice. Every individual's tax situation is unique, please consult with a licensed tax professional.
In this article we attempt to clear up the confusion on the rules governing truck driver per diem.
What is per diem? Trucker per diem is a per day travel expense allowance. Eliminates the need for proving actual costs for meals & incidental expenses incurred.
Do I have to spend all the per diem?
No. This is the maximum amount the IRS will let you claim on your tax return.
Who can claim trucker per diem?
Self-employed truckers who are subject to DOT HOS and who travel away from home overnight where sleep or rest is required. The Per Diem Plus mobile app software takes the guesswork out of tracking trucker per diem for OTR truckers.
Can all truck drivers receive per diem?
No. Drivers who start and end a trip at home on the same DOT HOS 14-hour work day cannot claim per diem.
What qualifies as a tax home?
Where you park your truck. Your regular place of business, or home in a real and substantial sense.
If I live in my truck, can I claim per diem?
No. A taxpayer who’s constantly in motion is a "tax turtle," or someone with no fixed residence who carries their “home” with them.
Are truck drivers allowed to claim a mileage allowance per diem?
Only fleets can use a cents-per-mile per diem. IRS’ standard mileage allowance is for use of a personal vehicle.
Can a driver claim per diem for lodging?
No. Trucker per diem is exclusively for meals and incidental expenses. You must have a receipt for all lodging expenses. A self-employed driver falls under the related party rules of IRC 267(b) & Rev. Proc 2011-47.6.07 and, therefore, cannot use per diem substantiation that includes a meals and lodging per diem.
Have you noticed Per Diem Plus is suddenly not tracking your trips? The likely cause is the location services settings have been changed on your device after software update by Apple or Google. This is an easy issue to fix.
iPhone
Android
Motorola Devices
What documentation meets the IRS substantiation requirements to prove overnight travel and expense?
Only Per Diem Plus or DOT ELD backups with an itemized log listing "time, date & place" for each per diem event. Unlike ELD backups, Per Diem Plus a can create an IRS-compliant itemized per diem report in seconds.
Can motor carriers pay per diem to employee drivers?
Yes. A motor carrier can offer per diem to drivers subject to DOT HOS and who travel away from home overnight where sleep or rest is required under an accountable per diem plan.
Is company-paid per diem taxable as income to an employee driver under an accountable fleet per diem plan?
No. Per diem is classified as a non-taxable reimbursement to an employee driver.
What are the current per diem rates for travel in USA & Canada?
The per diem rates for 2023 & 2024 are:
(IRS released annual update on September 25, 2023 in Notice 2023-68)
Can a driver prorate per diem for partial days of travel?
Yes. A partial day is 75% of the per diem rate.
How much per diem can I deduct on my income tax return?
A self-employed trucker can deduct 80% of per diem (100% for tax years 2021 & 2022) on their tax return.
What are Incidental Expenses?
Only fees and tips.
Are showers & parking fees incidental expenses?
No. Self-employed drivers may separately deduct expenses for: Per Diem Plus subscription, showers, reserved parking fees, mailing expenses, supplies and laundry.
Can employee drivers deduct company-paid per diem on their tax return?
No.
What documentation is required to prove other expenses?
Paper or electronic receipts that identify what, when and the amount are required. You can upload and store receipts on the Per Diem Plus app and share them electronically with your tax preparer in seconds.
How long should tax records be retained?
No less than 3 years from the filing date of an income tax return. You have access to your Per Diem Plus tax records for four years.
What published guidance has the IRS issued that explains trucker per diem?
Refer to IRS Revenue Procedure 2011-47 or use the Per Diem Plus app that takes the guesswork out of tax-related record keeping.
PDP Small Fleets requires users to complete the account setup HERE before using the app.
Per Diem Plus Fleets is also available on the Truckstop Marketplace, Samsara App Marketplace and Platform Science Marketplace
Mark is tax counsel for Per Diem Plus. With nearly two decades of experience advising trucking companies on per diem issues, Mark was responsible for defining the Per Diem Plus software logic rules that automatically calculates trucker per diem in accordance with IRS regulations. He also previously served as the consulting per diem tax expert for Omnitracs.
In addition to his time working with Per Diem Plus, Mark works in private practice as an Enrolled Agent at Mark Sullivan Consulting, PLLC specializing in federal tax controversy representation and consulting. He also served as the consulting and expert witness for the Federal Defenders Office and private defense counsel in financial crimes cases in multiple federal district courts. Contact Mark W. Sullivan, EA
Copyright 2017-2023 Per Diem Plus, LLC. Per Diem Plus proprietary software is the trademark of Per Diem Plus, LLC.®
First, and foremost, you want to make sure you have all expense receipts and documentation needed for any expenses you will be deducting on your tax return for 2016, especially major expense items like per diem and fuel. For your per diem expenses, be sure you have all 12 months of paper or electronic logs to substantiate time, date and place of the expense. Or, if you use Per Diem Plus®, all you need to do is run a report and send it to your accountant directly from the app. Unfortunately, per IRS Regulations, a calendar is not sufficient substantiation for per diem expenses.
If you are self-employed and have the ability to control when you invoice for end-of-year work, then delay invoicing for an end-of-year run until January, which will push the income into next year. This only makes sense if you expect to be in the same, or lower, tax bracket next year as this year.
If there are repairs that need to be made to your truck or supplies you need to purchase, etc. then make and pay for those purchases by year-end versus waiting until next year. Payment can be made using a credit card and still qualify for deduction in the current year even if you do not pay the credit card bill until next year.
Do you itemize your deductions rather than take the standard deduction? If so, then make some extra charitable contributions, cash or non-cash by the end of the year. However, be sure to obtain receipts for all charitable contributions regardless of the amount.
If you are on the borderline of being able to itemize, then aggregate deductions into one year or the other. This takes a little more planning. Examples include, paying an extra mortgage payment in one year to pay extra interest; paying two years of real estate taxes in one year, if you have control over the timing of payment (pay one on January 2nd to minimize interest and penalties and the other at the end of the year); and bunching charitable contributions into one year. Although the chance is slim, you do need to be cognizant of the Alternative Minimum Tax and whether this strategy could trigger it. You would want to discuss this with your tax professional before engaging in this strategy.
If you are self-employed, contributing to a retirement plan is a great way not only to save for retirement but to save taxes as well. There are several different plans to choose from. However, depending on which one you choose, governs when it needs to be set up. A SIMPLE plan would need to be set by October 31st of the first year of contributions; others need to be set up by December 31st. A SEP plan can be set up all the way up to the due date of the tax return, including extensions. Therefore, if you want to make a contribution but do not have the money by April 15th, you can extend your return in order to buy more time to make the contribution. Just remember, an extension to file the return is not an extension of time to pay the tax, just the SEP contribution.
IRA contributions must be made by April 15th even if you have filed for an extension. Generally, you can make a larger contribution to a plan other than an IRA, unless you plan to use the spousal IRA rules in order to double your contribution. This is another area where consulting with your tax professional may be beneficial to determine the best course of action.
Want to join the conversation? Drop us a line at info@perdiemplus.com
This article was written by Donna R. Sullivan, CPA of Per Diem Plus, LLC. Sullivan has over 25 years of tax consulting and preparation experience.
Please remember that everyone’s tax and financial situations are different. This article does not give and is not intended to give specific accounting and/or tax advice. Please consult your own tax or accounting professional.
Copyright 2016 Per Diem Plus, LLC. Per Diem Plus® proprietary software is the trademark of Per Diem Plus, LLC.
A Catch 22 For Drivers
Drivers currently retain ownership of their paper logbooks to comply with the IRS income tax regulations. Now that the U.S. Court of Appeals for the Seventh Circuit has upheld the ELD mandate and ruled that the FMCSA has satisfied the objections made by the Owner Operators Independent Drivers Association, who will “own” the logbook data1? While the media is awash with articles either applauding or deriding the court's decision, everyone has overlooked the mandate’s impact on tax compliance recordkeeping obligations for individual truck drivers. Everyone but Per Diem Plus.
The history of the IRS is that they ONLY accept driver DOT logbooks as proof of overnight truck driving trips to substantiate travel expenses, like per diem. Treasury Regulation 1.274-5A(c)(2) governs the rules for substantiation of travel expenses. A logbooks meets the requirements because it is a contemporaneous record that is created "at or near the time the expense or travel occurred"2 and establishes the "time, date and place" of the travel3. Contrary to popular belief a calendar or bookkeeper’s guesstimate worksheet of per diem trips does not fulfill these statutory requirements.
A Statutory Conflict - 6 month / 3 year rules
FMCSA Part 395 section 395.8(k)(1) requires motor carriers to retain all supporting documents used by the motor carrier to verify the information recorded on the driver’s record of duty status for a period of 6 months4. But...
Internal Revenue Code section 6501(a) establishes the statute of limitations for the IRS to assess taxes on a taxpayer expires three (3) years from the due date of the return or the date on which it was filed, whichever is later.
Drivers currently retain their logbooks to comply with income tax reporting and filing obligations. However, in my experience, since motor carriers own the ELD device they will assert ownership of the ELD data as well. And while fleets retain certain records required by FMCSA to comply with tax regulations, those using ELD’s promptly discard driver logbooks after 6 months. More troublesome is the revelation that many large fleets who were early adopters of ELD’s are now refusing to provide copies of the e-logs to their drivers. Will this behavior permeate the industry as fleets transition from paper to electronic logs?
What this means to you is that you may not have access to ELD data that is critical to both accurately claiming per diem expenses and defending yourself in the event of an audit. This will be particularly true if a driver is employed by multiple fleets during a calendar year. In the end, drivers will find themselves in a Catch 22 - a driver can have only one logbook that the motor carrier will now own so a driver cannot properly file income tax returns as they no longer have access to the logbook data.
Drivers that use Per Diem Plus have access to their data for four years whether they are driving for a company or themselves. Own your data and simplify your life by using the Per Diem Plus mobile app.
Want to join the conversation? Drop us a line at info@perdiemplus.com
This article was written by Mark W. Sullivan of D R Sullivan & Company, CPA PC, an accounting firm that has been providing taxpayer advocacy, consulting, and litigation services since 1998. The firm has nearly a decade of experience advising motor carriers and telematics providers on IRS substantiated per diem and is tax counsel for Per Diem Plus®, an IRS-compliant automated per diem and expense tracking Android and iOS app.
Please remember that everyone’s financial situation is different. This article does not give and is not intended to give specific accounting and/or tax advice. Please consult your own tax or accounting professional.
Copyright 2016 Per Diem Plus, LLC. Per Diem Plus proprietary software is the trademark of Per Diem Plus, LLC.
FMCSA Part 395 section 395.8(k)(1)
Supporting documents are the records of the motor carrier which are maintained in the ordinary course of business and used by the motor carrier to verify the information recorded on the driver’s record of duty status. Examples are: bills of lading, carrier pros, freight bills, dispatch records, electronic mobile communication/tracking records, gate record receipts, weight/scale tickets, fuel receipts, fuel billing statements, toll receipts, toll billing statements, port of entry receipts, cash advance receipts, delivery receipts, lumper receipts, interchange and inspection reports, lessor settlement sheets, over/short and damage reports, agricultural inspection reports, driver and vehicle examination reports, crash reports, telephone billing statements, credit card receipts, border crossing reports, custom declarations, traffic citations, and overweight/oversize permits and traffic citations. Supporting documents may include other documents which the motor carrier maintains and can be used to verify information on the driver’s records of duty status. If these records are maintained at locations other than the principal place of business but are not used by the motor carrier for verification purposes, they must be forwarded to the principal place of business upon a request by an authorized representative of the Federal Highway Administration (FHWA) or State official within 2 business days.
Per diem simply means a “per day” travel expense allowance. Although taxpayers have the option of keeping actual records of their travel expenses, the IRS has provided per diem allowances under which the amount of away-from-home meals and incidental expenses may be deemed to be substantiated. These per diem allowances eliminate the need for proving actual costs. However, a taxpayer must substantiate the amount, time, place and business purpose of expenses paid or incurred by adequate records or other evidence when traveling away from home1.
Both self-employed and employee truck drivers subject to the hours of services limitations of the Department of Transportation (DOT) can claim $63 for meals & incidental expenses (M&IE) for travel with the United States ($68 in Canada) and are not required to retain receipts or sales slips for these expenses. A trucker can deduct 80% of these expenses on their income tax returns2.
A truck driver who is away from home for only a portion of a day can prorate the M&IE allowance. For example, Per Diem Plus allows 75% of the M&IE rate where a driver departs their tax home after noon or returns home from a trip before noon.
No. Incidental expenses include only fees and tips given to porters, baggage carriers, hotel staff and staff on ships. Transportation between place of lodging and place where meals are taken and the mailing cost of filing expense reports are no longer included in the definition of incidental expenses3. Drivers using per diem rates may separately deduct expenses for postage, showers and reserved parking fees.
In order to claim any deduction, a taxpayer must be able to prove, if a tax return is audited, that the expenses were in fact paid or incurred. The IRS deems travel expenses particularly susceptible to abuse and requires truck drivers maintain an adequate accounting and sufficient documentary evidence to prove overnight travel. For example, logbooks, expense diaries or an IRS-approved software tool like Per Diem Plus.
Self-employed and employee drivers cannot claim per diem for lodging and are required to maintain documentary evidence for all lodging expenses4.
No. An individual is not away from home unless their duties require them to be away from the general area of their home for a period substantially longer than an ordinary workday and it is reasonable for them to need to sleep or rest5. For example, drivers who start and end a trip at home within the DOT 14 consecutive-hour “driving window” cannot claim per diem.
Tax home defined: An individual’s tax home is considered to be: (1) the taxpayer’s regular place of business, or (2) the taxpayer’s home in a real and substantial sense6. A taxpayer who is itinerant or someone who has a home wherever they happen to be working is never away from home for purposes of deducting traveling expenses.
This article was written by D R Sullivan & Company, CPA PC, an accounting firm that has been providing taxpayer advocacy, consulting, and litigation services since 1998. The firm has nearly a decade of experience advising large fleets and telematics providers on IRS substantiated per diem and is tax counsel for Per Diem Plus, an automated per diem and expense tracking Android app.
Please remember that everyone’s financial situation is different. This article does not give and is not intended to give specific accounting and/or tax advice. Please consult your own tax or accounting professional.
Copyright 2016 Per Diem Plus, LLC. The Per Diem Plus logo and Per Diem Plus are trademarks of Per Diem Plus, LLC.
An ex-trucker turned IRS Agent asked if the app is using GPS, what is to prevent a driver from carrying his phone while on vacation, activating the app, and then trying to claim Per Diem for his personal travel?
Technology alone cannot compel honest behavior. Per Diem Plus knows when a driver is home, for it auto-deactivates when the device is within the tax halo. However, the app was designed to account for vacations, off days and unforeseen delays like breakdowns, waiting for permits and weather that prevent a user from meeting the logic requirements written into the app. If Per Diem Plus detects a user is away from home, but has not met the logic requirements, it posts an onscreen notification (daily) whereby a driver can decline the notification (vacation, off day) or acknowledge (substantiate) they qualify for per diem. The app posts “Not on Trip” and records the date and GPS location after a driver declines the notification.
According to an ex-trucker turned IRS Revenue Agent the IRS ONLY accepts drivers D.O.T. log books for proof of overnights, as it is an official government document. He also mentioned that many of the carriers out there are now refusing to provide copies of the E-Logs to their drivers, making it impossible for drivers to provide the IRS with copies should they get audited. He was interested in learning if the app is “foolproof” and trusted as proof of Per Diem expenses.
Carriers refusing to provide copies of E-logs contributed to the design of Per Diem Plus.
Treasury Regulation 1.274-5A(c)(2) govern the rules for substantiation of travel. A D.O.T. log book meets the requirements of the regulation not because it is a government document, but because it is contemporaneous record that is created “at or near the time the expense or travel occurred” [1.274-5A(c)(2)(ii)(a)] and establishes the “time, date and place” of the travel [1.274-5A(b)(1)].
The IRS has historically relied on log books as a practical matter because no other reliable method existed to substantiate overnight travel for truck drivers. Whereas as the IRS asserts drivers take liberties with their log books, Per Diem Plus provides irrefutable evidence of travel – GPS coordinates cannot be gamed in relation to where a driver was on a particular day.
A far as making it foolproof we have designed the software to be tamper proof and fulfill the all the requirements of Tres. Reg. 1.62-2, 1.274-5A, and IRS Revenue Procedure 2011-47 Sec 2.04, 2.08, 4.04, 7.01(2), et al (superseded most recently by 2015-63).
Per Diem Plus™ Releases the First Automated Per Diem and Expense Tracking App for Truck Drivers
ST. LOUIS, MO (11/23/15) — Per Diem Plus, LLC has announced the launch of a mobile application specifically designed for US-based over-the-road truck drivers to streamline and eliminate the guesswork of tax-related recordkeeping.
“Our Android-based app creates a paperless, IRS-compliant record of per diem, travel-related and business expenses for drivers operating in the contiguous U.S., Alaska and Canada,” according to John Stefek, Director of Client Experience at Per Diem Plus. Per Diem Plus will save time and money for drivers who deduct these expenses on their own tax returns.
After the truck driver sets up their profile, Per Diem Plus uses GPS-data to automatically track each qualifying full or partial day of travel away from home. The application incorporates scanning technology to allow drivers to eliminate receipts along with keeping track of their lodging, travel-related and business expenses.
This information, accessible on their phone, can then be used by the driver or their tax preparer to accurately claim and validate per diem and expenses on their tax return. The Per Diem Plus application is available in the Google Play store for $9.99/month or $7.99/month for members of the Owner Operator Independent Drivers Association (OOIDA). An iOS-based version for iPhones and iPads is expected to launch Q2 2016.
Per Diem Plus was developed and is managed in the USA by tax professionals with transportation industry experience.
Please visit https://www.perdiemplus.com for more information including a step-by-step Per Diem Plus demonstration.
About Per Diem Plus
Per Diem Plus, LLC is St. Louis-based company dedicated to building technology-based tools specifically for over-the-road transportation workers. Per Diem Plus provides a mobile phone-based application designed to interpret and apply IRS rules on per diem benefits.
