trucking business

[oceanlovin'ea]

Let me see if I can explain this scenario clearly. Actually I am trying to look ahead and do some tax planning and see what is the best way to operate this business.

A couple of years ago wife had w-2 clerical job and husband had a w-2 job as a truck driver.
She also worked a side business for her niece who runs a trucking business (plus a full time job). She did clerical work and dispatching for them part time.

When husband retired, he started to work for his wife and was driving a truck for the trucking business through her. He has not reached full retirement age yet so must be careful how much he earns (he took early social security)

She lost her job so the part time job is now a full time job. Husband is on the road around 200 days a year. Last year she paid him a modest salary.

As a truck driver, he can take a per diem deduction for the days on the road. But if he is an employee, he would have to do a 2106 which they don't itemize deductions so he loses that. Can she have an arrangement where she reimburses him for his expenses on the road.
Would they be better off to be a wife/husband business? They could allocate how much of the business is her and how much is his.

I have probably left out details that you need to know. So ask questions and help me figure out what is best for this couple.

Thanks.

Linda, EA

[oceanlovin'ea]

moving it up

just moving this thread up...any takers?

Linda, EA

[ddoshan]

I am not sure but ... It would seem that if they followed the rules of an accountable plan I would think the business could reimburse him for his expenses. Even if he is an employee of the company wouldn't you think.

[BHoffman]

Linda - you might like this website:

http://www.thetruckersreport.com/trucker-tax-tips/

Just google "Truckers tax deductions" and see the wonderful stuff the internet has to offer

[oceanlovin'ea]

per diem or actual expenses

If the employer is going to reimburse the truck driver for expenses, would you use his actual expenses or the per diem rate?

Linda, EA

[ChEAr$]

partnership

Yes, a regular 1065 partnership and NOT an LLC or a corporation. If one of the latter, the business would have to file returns in every other state driven in, and not talking just about fuel taxes, but the full monty, entity returns.

My client and his wife operate this way and are co drivers. Beauty of it is double the 59$ rate the parnership pays for meals on the road of course.

[oceanlovin'ea]

Right now she is a schedule C, sole proprietor. She hired her husband to drive a truck. She is a subcontractor and works for her niece with dispatch and office work too.
That is why I was wondering if for this year she can either pay his actual expenses (food) or do a per diem reimbursement for him.

I am thinking that maybe they should just be wife/husband schedule C's. The issue is that he is drawing social security (early draw) and is limited in how much he can earn. I don't think they have to be 50/50 partners. She could be more of a partner than him.

She used to have another job also but got laid off. So she is going with him in the truck a lot now. She can do her dispatching while they are on the road. She has computer and cell phones.

Since she is on the road with him, would she get a per diem too?

Haven't done a trucker in a long time. So trying to get this straight in my mind. Appreciate all the help.

Linda, EA

[oceanlovin'ea]

ChEAr$

Does she drive too or just go with him in the truck? Wondering if it matters whether she is actual driver. She is navigator.

New territory for me.

Linda EA