While the IRS allows most industries to deduct 50% of meals, drivers subject to the Department of Transportation's “hours of service” limits, can claim 80% of their actual meal expenses. The hours of service rule requires drivers who have driven a certain amount of hours to stop and rest for an assigned period of time.
If you are an owner-operator, the rule is simple, you get to claim the tax deduction for each day that you are away from your “tax home”. On the days that you depart and the days that you arrive at home, you must claim a partial day allowance instead of a full day allowance. That is ¾ of the standard allowance.
Drivers employed and receiving a W-2 are no longer eligible to claim per diem expenses for meals or travel due to the Tax Cuts and Jobs Act.
This guidance clarified that motor carriers with drivers that are subject to the hours-of-service rules can deduct 100% of the meals portion of the per diem expense for the calendar years 2021 and 2022. The deduction was 80% before 2021 and will return to 80% after 2022.
In most cases, people who travel for work may only claim 50% of their meals and beverage expenses. However, if you are a long-haul truck driver, you can deduct 80% of these expenses. However, if you are claiming meal expenses incurred in the United States, you are entitled to 50% only of the costs.
The per diem rate for meals 1-1-2021 thru 9-30-21 was 80% of $66 per day and 10-1-2021 thru 12-31-2021 was 80% of $69 per day. The per diem rate for meals in 2020 was 80% of $66 per day. The per diem rate for meals in 2019 was 80% of $66 per day.
If I'm a driver and I choose to sign up for per diem, does that put more money in my pocket? Absolutely, and the benefit is it brings more money to you in real time. In most cases, drivers don't need that money at the end of the year at tax time; they need it while they're out on the road every week.
Can employers deduct per diem? Employers can deduct up to 50% of per diem spending for meals and incidentals. Lodging expenses are usually completely deductible as long as they are within per diem limits.
The per diem rates in lieu of the rates described in Notice 2019-55 (the meal and incidental expenses only substantiation method) are $71 for travel to any high-cost locality and $60 for travel to any other locality within CONUS.
The Consolidated Appropriations Act of 2020 provided an interesting benefit for businesses in 2021 and 2022. Instead of being limited to a 50% deduction for business meals, businesses can deduct 100% of certain meals provided by restaurants.
Clothing and Grooming Expenses
Other possible tax write-offs for truck drivers include toiletries, shaving kits, shower fees and laundry expenses related to maintaining your uniform. Work clothing that is not part of a uniform is only deductible if it cannot also be used as personal clothing while away from your truck.
If you're not sure, ask your company. Owner Operators CANNOT deduct the income lost as a result of deadhead/unpaid mileage. But, Owner Operators CAN deduct the expenses incurred to operate the truck during that time such as fuel, tolls and scales.
3. Is My Per Diem Taxable? Per diem payments are not part of an employee's standard wage, so technically, they're not taxable. However, under certain conditions, it can be considered taxable income.
Receipts are usually not required under the per diem method. Instead, the company simply pays the allowance to the employee, who must substantiate the time, place and business purpose of the underlying travel.
Meals expenses that are 80% deductible
Expenses for food and beverages are 80% deductible if the food or beverage is consumed while away from home by workers during periods of time when they are subject to hours of service limitations imposed by the federal Department of Transportation.
As an employee, you may qualify for a per diem tax deduction by using the per diem rates to determine your lodging, meal, and incidental expenses. To find per diem rates, visit www.gsa.gov. Report your per diem tax amounts on Form 2106. You don't need to keep a record of your actual costs.
1. Annual high-low rates. For purposes of the high-low substantiation method, the per diem rates in lieu of the rates described in Notice 2020-71 (the per diem substantiation method) are $296 for travel to any high-cost locality and $202 for travel to any other locality within CONUS.
The IRS does not require that you keep receipts, canceled checks, credit card slips, or any other supporting documents for entertainment, meal, gift or travel expenses that cost less than $75.
The rule is that you're allowed to claim a meal as subsistence – but it has to be outside of your normal working routine. So, if you're attending the same workplace every day, it's unlikely that you can claim any subsistence as an allowable expense.
The 2022 special trucker per diem rates for taxpayers in the transportation industry increased $3 from 2020-2021 to $69 for any locality of travel in the continental United States (CONUS) and $74 for any locality of travel outside the continental United States (OCONUS).