Fuel for Thought

Carpe Per Diem

As we near the end of 2021 and thoughts of year end bookkeeping are on the minds of many, don’t miss out on the additional tax deduction for truck drivers. 

On November 16, 2021, the IRS (Internal Revenue Service) had issued guidance for the Taxpayer Certainty and Disaster Relief Act of 2020. It states that while temporary, this act will benefit owner operators for tax year 2021 and 2022. 

Under the terms of this act, you can deduct 100% of your M&IE. For those new to the trucking industry, M&IE stands for Meals & Incidental Expenses, also known as Special Per Diem for those subject to HOS (Hours Of Service).

Excerpt:

Section 274(n) generally limits the amount allowable as a deduction under § 162

for any expense for food or beverages to 50 percent of the otherwise allowable amount.

For an individual during, or incident to, a period of duty subject to the hours of service

limitations of the Department of Transportation, § 274(n)(3) provides that, for taxable

years beginning in 2008 or thereafter, the deductible percentage for these expenses is

80 percent.

For tax year 2021 -2022, this act INCREASES your allowable Per Diem deduction to allow 100% of your Per Diem amount.

Don’t leave money on the table, ensure that your tax preparer is also aware of this change in the tax code.

Also, don’t forget that in 2021, Per Diem rates increased. For January 1 - September 30, 2021 the per diem rate is $66 per full day. For October 1 - December 31, 2021 the per diem rate is $69 per full day.

Use the links below to visit the IRS documents pertaining to the new allowable Per Diem rates.

https://www.irs.gov/pub/irs-drop/rp-19-48.pdf

https://www.irs.gov/pub/irs-drop/n-21-25.pdf

https://www.irs.gov/pub/irs-drop/n-21-63.pdf

See you down the road,

Greg