Under the 2017 Tax Reform and Jobs Act company drivers who travel away from home overnight will no longer be allowed to claim on average $18,000 of unreimbursed employee business expenses on Schedule A, Itemized Deductions, which includes per diem and other job-related expenses[1]. The good news is that motor carriers can implement an IRS-compliant accountable per diem program using the Per Diem Plus® FLEETS mobile application platform to offset the lost tax deductions for their drivers, while enhancing recruiting and retention.

EFFECTIVE OCTOBER 1, 2018 the trucker per diem rates were increased to $66 US and $71 Canada

PDP FLEETS PRODUCT SHEET

A fleet implementing a company-paid per diem plan can raise effective driver pay by 2.6 – 3.9 CPM at a cost of only 1.6 CPM to the fleet. All per diem paid to a driver is treated as a non-taxable reimbursement and not reported on Form W-2.

 

Single Driver

Example :

  • In 2018 the single driver earned $72,000 and incurred $16,830 of travel-related expenses he must cover using after-tax income.
  • In 2018 the single driver earns $72,000 and elects to enroll in a company-paid per diem plan at $66 / day for each night he is away from home. His payroll and income tax bill will decrease by $4,990 equal to a $0.039 pay raise.

 

Married Driver – One Earner Household & No Dependent Children

Example :

  • In 2018 the married driver earned $72,000 and incurred $16,830 of travel-related expenses he must cover using after-tax income.
  • In 2018 the married driver earns $72,000 and elects to enroll in a company-paid per diem plan at $66 / day for each night he is away from home. His payroll and income tax bill will decrease by $3,307 equal to a $0.026 pay raise.

 

 

Is your motor carrier struggling with implementing a per diem program? The Per Diem Plus Fleets mobile application platform is an easy and cost-effective solution that automates an IRS-compliant substantiated per diem plan[i] that will not only raise employee driver take-home pay, enhance recruiting and retention, but offsets the elimination of driver tax deductions for per diem and unreimbursed employee business expenses[ii]. Contact us at Info@perdiemplus.com to schedule a free demonstration.


 

 

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This article was written by Mark W. Sullivan, EA, who has been providing taxpayer advocacy, consulting, and litigation services since 1998. Prior to starting a private practice, Mr. Sullivan was an Internal Revenue Officer with the New York, NY, Saint Louis, MO and Washington, D.C. offices of the Internal Revenue Service. He has over a decade of experience advising transportation industry clients with respect to per diem issues.

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 2018 Per Diem Plus, LLC. Per Diem Plus proprietary software is the trademark of Per Diem Plus, LLC.®

[1] Under H.R. 1 “Tax Cuts and Job Act” OTR employee truck drivers will no longer be allowed a tax deduction for unreimbursed business expenses, which includes “meal expenses that take place during or incident to any period subject to the Department of Transportation’s “hours of service” limits” and miscellaneous expenses.

[2] In accordance with IRS Revenue Procedure 2011-47 Sec 4.04 (superseded most recently by Notice 2017-54) covers meals and incidental expenses only. A driver can deduct 80% of per diem.

[3] In accordance with IRS Revenue Procedure 2011-47 Sec 4.04 (superseded most recently by Notice 2017-54) covers meals and incidental expenses only. A driver can deduct 80% of per diem.

[i] All amounts paid under the arrangement are treated as paid under an accountable plan and are excluded from income and wages.

[ii] Under H.R. 1 “Tax Cuts and Job Act” OTR employee truck drivers will no longer be allowed a tax deduction for unreimbursed business expenses, which includes “meal expenses that take place during or incident to any period subject to the Department of Transportation’s “hours of service” limits” and other job-related expenses.

Per Diem, Tax, Trucker Impact, truckers