Tax Deduction Question

Nytmare897 · May 1, 2015

Being new to this job I Heard just about everything iwork related is tax deductable. My main questions is what are the terms in which you can deduct a night for a hotel room. I heard 50 bucks a night. So I want you to talk to me like I am a four year old. Explain it to me. Is that true? If so, what qualifies? If I take a load 300 miles or do I have to drive more? Thanks.

ATeam · May 1, 2015

To be deductible, a business expense must be "ordinary and necessary."

This video explains the terms a bit.

This publication lays it all out.

In the case of a hotel, it's not about the amount. It's about ordinary and necessary. If you are in a rural area, a hotel may cost you $40 a night. In some cities, it might cost $90. Both would be fully deductible. Now, if you paid $300 for a room at a vacation resort, the IRS might get concerned since the luxury would not likely be considered necessary in your business.

If you are staying in low-end or mid-range hotels in the course of doing business, you will probably be fine deducting the entire cost of all rooms. Even if you found yourself in a city where a big event made hotel room prices jump to over $100, it remains a reasonable and necessary expense. It's not about the price itself. It's about the circumstances in which the expense is incurred.

Be sure to keep your receipts for three years to document the expense in the event of an audit.

Nytmare897 · May 2, 2015

Ateam...You helped a bit. The video answered nothing really. The link had way too much information to sift through. This is why in my post I said talk to me like I am a four year old. Not only do I not know anything...I do not understand. All I am really asking is..when can I deduct a hotel room? See I take long runs and short ones. So I just want to know when I can dedcuct? Is it based on miles? Hours? Or both? What?

paullud · May 2, 2015

Basically it's based on you getting a hotel room that is reasonable for being work related. If you get a room at the Motel 6 in BFE, Nebraska then it's deductible. If you book the penthouse at Trump Towers for a week then it's viewed as a vacation or not ordinary. A hotel room is viewed as a business expense so you can write off the full amount.

asjssl · May 3, 2015

If you can legally claim a days pier diem ..you can add the room to your "deduction" list

Nytmare897 · May 3, 2015

Thanks Paul

ATeam · May 4, 2015

Nytmare897 said:
Ateam...You helped a bit. The video answered nothing really. The link had way too much information to sift through. This is why in my post I said talk to me like I am a four year old. Not only do I not know anything...I do not understand. All I am really asking is..when can I deduct a hotel room? See I take long runs and short ones. So I just want to know when I can dedcuct? Is it based on miles? Hours? Or both? What?

You are seeking a single answer to a question in which the correct answer differs depending on the circumstances.

Is it legal to drive 60 MPH where the posted speed limit is 65 MPH? The simple answer is yes but the true answer may be no if additional circumstances are specified. For example, if you are required to log and are out of log book hours, it is not legal to drive at all. If you are drunk, it is illegal to drive in any speed zone. So, what is the true answer to the 60 MPH question? It depends on the circumstances.

In expediting, or any business for that matter, legal compliance is not simple. So too with tax law. While the desire for straightforward, commonsense, simple answers is understandable, being in business requires people to rise to the complex requirements of the game. Four-year-olds do not own and operate businesses. Adults do and the rules are written by and for adults.

Back to your question: "So I just want to know when I can dedcuct? Is it based on miles? Hours? Or both?," the ability to deduct a hotel room is not based on miles or hours. You can deduct a hotel room when the expense is "reasonable and necessary" in the course of your business.

What does "reasonable and necessary" mean? It means what the IRS says it means. What does the IRS say it means? The answer is in the IRS publication I linked to above, but as you discovered, the answer is not simple.

You have not shared the circumstances in which you would pay for a hotel room. When the circumstances are known, simpler answers can be provided (as simple as yes or no) because it can then be determined what parts of the rules apply to you in those particular circumstances.

mjmsprt40 · May 4, 2015

I sleep in the van whenever possible partly because even cheap motels cost something and partly because I'm an incurable Scotsman (I inherited it from my Dad, who had it worse than I do). There are times when I will choose a motel room, and it has to do with weather. Extreme cold weather will drive me to seek a room, and hot weather may do the same because sleep becomes difficult in extreme hot or cold--- with the side "benefit" that sleeping in extreme cold may become permanent. So, I get a room those nights--- and save the receipts, and deduct on my taxes.

Fkatz · May 13, 2015

If you take a motel room it is completely deductilbe while on the road, or on a weekend under or not under a load, and the amount can be used as a complete deduction on line 24A Travel

You add all your hotel/motel reciepts together and enter it.

It has nothing to do with you Per Deim reimbursement which is for "food ONLY" . The Per Deim covers your meals on the road, it is strickly a reimbursement for what you spend up to $59.00 per day. Naturally you can eat what ever you would like as a change from Fast Food, you can stop at a steak or seafood house and order Surf and Turf if you want wbut your only going to get a $47.20 reimbursment on your taxes,

The Per Deim Rate is 80% of the total of your logged/ or proved Days that you are away from home for 24 hours or more.

Again that total of days is computed as total times 59.00 per day, times 80%. Make sure if you do your own taxes for fine the box stating that your hours are subject to DOT Regulations, and Check itl.

If you run for a company that you get a load under, but have to deadhead home, on the time over 24 hoiurs is deductilbe in 1/4 hour segments.

Any questions do not hesitate to ask

Franklin Katz ATP PA PB
Frank's Tax & Business Service
315 E. King St
Kings Mountain, NC 28086
704-739-4039
Fax. 704-739-3934
Website: Frankstaxbusiness,com

Nytmare897 · May 21, 2015

This sort of helps and someone who does taxes told me...You add all deductions together and then subtract that amount from your total gross income. What you are left with is the amount you pay taxes on.

usafk9 · May 21, 2015

Nytmare897 said:
This sort of helps and someone who does taxes told me...You add all deductions together and then subtract that amount from your total gross income. What you are left with is the amount you pay taxes on.

Might I strongly suggest that you have a professional prepare your taxes for you?

Fkatz · May 23, 2015

Nytmare897 said:
This sort of helps and someone who does taxes told me...You add all deductions together and then subtract that amount from your total gross income. What you are left with is the amount you pay taxes on.

Who ever told you that does not know trucking,
Since I was a company Driver, and O/O in expediting, if you would like give me a call to answer your questions
I can give you a better idea of what and what not can be deducted, or you can go on my website and download under Trucker information , the complete deduction listing for truck driver.

Franklin Katz, ATP, PA PB
Frank's Tax & Business Service
315 E. King St
Kings Mountain, NC 28086
704-739-4039
Web Site www.frankstaxbusiness.com
E-mail [email protected]