Fuel for Thought

Carpe Deduction

Earlier this year, there was a shake up within the trucking industry regarding Per Diem. The changes earlier this year basically affected company drivers. Owner operators can still use Per Diem deductions for tax purposes.

What is Per Diem? It is the standard daily rate for meal allowances for transportation workers.

For several years, the standard Per Diem rate for transportation workers was $63 per day. For each full day away from home, you could deduct 80% of $63 or $50.40 per day(per diem).

This year was no different until October 1, 2018 came to pass. As of October 1, 2018, the Per Diem rate has been increased to $66 per day, at the same 80% rate, that now comes to $52.80 per day, for each full day away from home.  

Note that it is for each full day away from home. For each partial day, or each day that you leave from home or return to home, you are only allowed a partial per diem rate. According to the IRS Publication 463, any partial day, or any day where you either leave or return home is counted as ¾ Per Diem. Throughout the year, as you tally your days away from home, don’t forget to count those partial days and claim your ¾ per diem rates. For Jan 1, 2018 - Sept 30, 2018 the partial (¾) per diem is $47.25 and 80% is $37.80 . The current rate for partial (¾) per diem is $49.50 and 80% is $39.60 for October 1, 2018 until another change is made by the IRS.

To recap:

Per Diem rates have increased this year, but not for the full year.

Jan 1, 2018 - Sept 30, 2018 rate is $63.00 per day. You are allowed 80% of the per diem rate which is $50.40 for full days.

Jan 1, 2018 - Sept 30, 2018 partial day rate is $47.25. You are allowed 80% of the per diem rate which is $37.80 for partial days.

Oct 1, 2018 - Dec 31, 2018 rate is $66.00 per day. You are allowed 80% of the per diem rate which is $52.80 for full days.

Oct 1, 2018 - Dec 31, 2018 partial day rate is $49.50 per day. You are allowed 80% of the per diem rate which is $39.60 for partial days.

Until further notice from the IRS, the new rates will remain in effect for 2019 and beyond.

Carpe Diem and Carpe Deduction!

 

See you down the road,

Greg