Last minute tax prep? Owner-operators, don’t forget per diem deductions

April 10, 2024

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Truckers preparing last-minute tax paperwork shouldn’t forget about per diem deductions. Despite inflation, the per diem for days away from home remains unchanged for 2023-24.

Special rules apply for anyone who works in the transportation industry – defined in Rev. Proc. 2019-48 as someone whose work directly involves moving people or goods by airplane, barge, bus, ship, train or truck.

The IRS increased the per diem rate in 2021 for self-employed truckers or owner-operators to $69 per day, up from $66 per day. Per diem for travel in Canada increased from $71 to $74. Rates have remained unchanged since the IRS announced the 2023-24 per diem rates on Sept. 23, 2023.

According to Barry Fowler with Trucker Tax Tools, a driver can prorate per diem for partial days of travel and claim 75% of the rate.

He also explained that self-employed owner-operators can deduct 80% of the per diem, down from 100% for tax years 2021 and 2022.

To deduct your travel expenses, you, as the taxpayer, must be away from your home residence or tax home longer than what would constitute your ordinary work day. You must be away from your home long enough that you cannot complete the trip without sufficient sleep or rest.

The rest period must be long enough to require adequate lodging, such as an overnight stay at a motel or in your truck. A short duration of rest, such as a quick nap at a rest stop, does not qualify your travel expenses as deductions because it does not satisfy the overnight rule.

However, it is not necessary that you be away for more than 24 hours in order to meet the overnight rule. An example of meeting the rule would be if you were traveling on business and rented a room to sleep or rest during a layover. An example of not meeting the rule would be if you were traveling several hundred miles and needed to stop to rest for an hour.

If you have no regular place of business and do not maintain a fixed home, you may not deduct any travel expenses. A trucker who lives in his or her truck during the entire course of the year cannot deduct per diem meals. LL