The average wage of a trucker in the United States depends on a number of different factors: location, routes, experience, company size, vehicle type. For example, hazmat truck driver salary will be higher than that of an ordinary trucker, because it is associated with hazards and requires a special permit. But one way to reduce your own expenses on the road and increase your earnings is per diem .
Per diem for truckers is one of the most important benefits offered by some trucking companies to attract professional drivers. When you first start working as a trucker, the first change in your lifestyle involves having to buy food and snacks on the road because you’re away from home for a long time. For starters, some trucking companies provide per diem for drivers. Meals are one of the most important per diem items for most truck drivers.
Most transportation companies that care about the health and general well-being of the driver and provide them with per diem programs, HMD Trucking is no exception to this list. What’s more, per diem is a good tool for attracting new employees.
The term “per diem” translates from Latin as “per day.” Thus, it is a way to make up for your daily expenses on the road. Remember that the IRS does not tax per diem.
To explain simply, the Per Diem deduction is a tax deduction that allows you to justify the normal necessary expenses for meals and some incidental payments while traveling away from home.
The IRS allows transportation workers who make business trips under the hours-of-service rules to deduct meal expenses from their income. The per diem rate is fixed and set by the IRS. On October 1, 2021, the rate was increased by $3 and is currently $69 per day in the continental United States. You should also know that the IRS allowed an 80% deduction until 2021, but the Federal Consolidated Appropriations Act for 2021 (FCAA) temporarily allows a 100% per diem deduction for 2021 and 2022.
IRS Publication 463 states that to qualify for these deductions, you must meet both of the following requirements:
- Your job requires you to be away from your place of residence for significantly longer than your normal workday.
- You need to sleep or rest to meet the requirements of your work away from home.
What might this mean for the driver? If you are an owner-operator, it’s quite simple: you are entitled to a tax deduction for each day you spend away from your “tax home”. On the days you leave for a trip and when you arrive home, you are entitled to a part-day deduction. It is ¾ of the standard benefit.
The situation gets a little more complicated if you are a local driver. Are you away from home for long periods of time? Local and regional drivers are mostly away from home for much longer than the average eight-hour workday. So the first part of the requirements is very easy to meet. But you have to meet both conditions to get the deduction. In other words, drivers who start and end their trip at home on the same workday under DOT HOS will not qualify for the per diem.
In addition, IRS Publication 463 also states that you must have a “tax home. There are three criteria for determining your tax home. To qualify, you must meet at least two of the following three items:
- You have incurred living expenses in your primary home that you have to duplicate because your job requires your absence from that home.
- You have not left the area in which both your historic residence and your declared primary home are located; a member or members of your family live in that home; or you regularly use that home for living purposes.
- You conduct part of your business in the area where your principal home is located and you use this home for your residence while conducting business in this area.
To summarize in simple terms, the point of everything written above:
- The IRS requires you to spend periods of time away from your home much longer than a standard work day.
- You have a home from which you will be leaving.
In 2022, if you meet the above two requirements at the same time, you are allowed a $69 deduction for each full day away from home in order to work as a driver and assistant who helps with business functions. You can deduct $51.75 for each part-time day you work as a driver and attendant who helps with business functions.
The easiest and most reliable way to start keeping per diem records yourself is to start a per diem calendar where you put an “X” for each full day worked and a “/” for each part day worked. You can do this either on a paper calendar or on your smartphone calendar. There are also quite a few apps on the market that help you keep track of your drivers’ hours.
Given your time, you’ll be able to calculate exactly how many per diem days you have for your tax preparer during tax season. To prove per diem, you will need to provide DOT ELD logs showing the time, date, and location. Also, it’s a good safe practice to keep all receipts and travel documentation for at least 3 years.
Receiving a per diem means that you cannot take advantage of the “standard deduction for meals” during tax season. However, it is interesting to note that most U.S. drivers receive approximately the same amount after taxes at the end of the year, regardless of whether they received a per diem.