Truck Driver Deductions

[S T]

Happy New Year EveryOne!

I wish all of us a profitable and uncomplicated Tax Filing Season!

Already the phone calls have begun! So here is one from one of my Long Haul Truck Drivers! I just need confirmation starting out the new Tax Season.

Phone conversation:
Client: Happy New Year! Beginning to gather my records for 2006 and I understand that all expenses that I incurr for the 5 days that I am out on the Truck is deductible.

Tax Preparer (Me): What type of expenses are you referring to? We have always deducted your per diem based on hours out, other expenses such as gloves, safety equipment, cell phone pro rated, expenses that were not furnished or reimbursed, etc?

Client: My co-driver states that he can purchase DVD's and CD's and the associated equipment for use in the Truck while on the Road and his Tax Preparer deducts them as an expense.

Tax Preparer (Me): I am not sure about that, does not seem like it fits the regulations of an ordinary and necessary business expense. Remember, your Co-Driver and his preparer also stated the wrong per diem rate in 2005. ( I couldn't find my previous post to this issue)

Client: But my co-driver is going to write off all of his entertainment expenses for DVD"s and CD"s, his recorder, TV, etc, why can't I???

Tax Prerpare (Me) I will research, but I really don't think it is a viable expense that will be allowed on an audit, and I am reluctant to enter on your tax return. For the nominal amount that you will save, it will cost you additional fees in an audit for penalties and interest, besides which the deductions are not allowed under the regulations.

So now the question, so please correct me if I am wrong, DVD movies, CD Music, TV, and recorders would not be allowed as an expense for Long Haul Truck Drivers!

If I have something in print such as I did on the Per Diem rate in 2005, it will let this taxpayer know that his Co-Driver and their Tax Preparer is not correct.

Thanks!

Sandy

[jainen]

Why not?

>>DVD movies, CD Music, TV, and recorders would not be allowed as an expense for Long Haul Truck Drivers<<

Why not? It seems like a reasonable travel expense to me.

Of course, music equipment is listed property so an employee can't deduct it because it is not for the convenience of the employer, but self-employed could depreciate the business percentage in the ordinary way if he keeps a usage log.

[S T]

truck Driver

Forgot to say, on W-2 for Fed Ex (used to be Watkins before buy out), so not self employed, and do you think they would keep a log of business and personal!.

So?

Sandy

[JG EA]

Jainen kidding

I think so anyway.

Some things are so inherently personal that they cannot be deducted. I remember being told that business people can deduct their eyeglasses because how else could they do their work? Eyeglasses are listed explicitly as not deductible, but of course the authority (the assistant) was giving out this free advice to anyone who would listen.

[S T]

Jainen Kidding????

What is there a new side to Jainen????

Jainen, all kidding aside, I do respect you and always look forward to your posts!

Sandy

[Brad Imsdahl]

Entertainment expenses are deductible only if they are related in some way to promoting or obtaining new business from customers or clients, or provided to employees as some kind of fringe benefit. (see chapter 2 of IRS Pub 463).

To deduct your own entertainment where no new business is expected, it would have to be categorized as travel expenses. Pub 463, page 5 lists common travel expenses allowed. Nothing in that chart is remotely similar to music CDs, DVDs, TV, etc.

In addition to the strict rules on travel and entertainment, both types of expenses would also need to pass the ordinary and necessary test in general for business deductions. How can a professional driver claim he needs to watch a DVD while driving on the road? If anything, I would think that would hinder is ability to perform his job.

[jainen]

Did you see

>>Jainen Kidding????<<

Did you see any disclaimer on that post? You know Brad has a special spam filter just for my posts, and that one got through because it's completely true.

DVD players ARE listed property, in the category of "property of a type generally used for purposes of entertainment, recreation, or amusement." As a FedEx employee, the taxpayer can not deduct it unless it is for the convenience of the employer. A self-employed taxpayer can only deduct it in accordance with his documentation of business usage.

Of course, knowing the basic law doesn't make the babysitting job any easier. Them truckers don't take kindly to little bugs in their way. In my professional practice I don't confuse clients with technical jargon like "convenience." I just explain that a DVD player is an extravagant expense but I'm happy to give a full deduction for his eight-track.

[S T]

Thanks

Thanks Jainen and Brad,

Sandy