How to Claim Per Diem on Taxes as a Truck Driver

Truck drivers often face unique challenges when managing their finances, particularly in tax deductions. One significant opportunity for savings is claiming per diem expenses, which can offset costs incurred during work-related travel. Understanding how to claim these expenses effectively is essential for maximizing tax benefits.

Requirements for Claiming

To claim per diem expenses, truck drivers must meet specific IRS requirements. The travel must be away from the taxpayer’s tax home, defined as the city or area where their primary business is located. This means the driver must be on an assignment requiring them to be away long enough to necessitate sleep or rest.

The per diem method can only be used if the employer does not reimburse these expenses. If an employer provides a per diem allowance, it must be included in the driver’s income unless it is part of an accountable plan. Such plans require substantiating expenses with receipts and returning any excess allowance. Self-employed drivers claim the per diem deduction on Schedule C and must maintain thorough records.

Determining Per Diem Rates

Per diem rates, set annually by the General Services Administration (GSA), vary based on location. For 2024, the standard rate for travel within the continental U.S. is $66 per day for meals and incidental expenses, with higher rates for high-cost areas.

Drivers must log cities and travel dates to apply the correct rate. For the first and last day of travel, the per diem rate is typically 75% of the full daily rate. The IRS permits an 80% deduction of the per diem amount for those in the transportation industry, reflecting their significant travel-related expenses.

Reporting on Tax Documents

Truck drivers must use the correct forms and guidelines to report per diem expenses. Self-employed drivers typically use Schedule C (Form 1040) to detail business income and expenses. Per diem expenses are categorized as travel expenses.

Accurate record-keeping is critical. A travel log with dates, locations, and days on the road is necessary to calculate the total deductible amount. IRS Publication 463 provides guidance on required documentation and deductibility limits.

When filing taxes, drivers must ensure their per diem deduction adheres to the 80% rule for the transportation industry, as outlined under IRS Code Section 274(n).

Documentation

Proper documentation is essential for substantiating per diem claims. Truck drivers should maintain a detailed record of travel activities, including dates, locations, and the purpose of each trip. This should be supported by receipts and other relevant documents.

Organizing records according to Generally Accepted Accounting Principles (GAAP) is recommended. Clear and consistent categorization simplifies transferring information to tax documents. Accounting software can help by digitally storing and organizing receipts, mileage logs, and other records. Many programs generate reports that can be directly used for tax preparation, ensuring per diem claims are fully documented.