New Client:Truck Driver-Guidance please

[Beth]

I have a new client coming in next week, who is a truck driver. This is my first client with this career, and I could use some guidance.

What I know at this time is that he does not own his own truck and works for an employer, driving throughout the lower 48 states. He has not kept records of actual expenses, and "thinks he can" come up with the days on the job and gone overnight.

He has no idea where his last year tax returns are, is not sure who did them, but knows that he needs to file this year, and that he will file MFS as he just got married and owes the IRS money. Was in TX last year, and MN this year. Also currently on disability, but not sure yet of details on that.

So, any guidance on what I should be asking and looking for (a loaded question, I know), particularily with regards to per diem, would really be appreicated!!

[S T]

Truck Drivers

See The Taxbook starting around page 8-9, has some per diem info.

Also a couple of sites I have found to supply some other information, one is a message board http://roundtable.truck.net

http://www.driversdailylog.com/ddldaysoutforperdiem.htm

http://www.newbiedriver.com/articles/Tax_Deduct_Items.htm

I have not really checked the validity of some of the expense information, I had the sites bookmarked regarding the per diem info.

The t/p should also have a log book to provide the days out.

Sandy

[Snaggletooth]

Suspicious

I wouldn't believe this guy, Beth. But you can successfully file his taxes.

One of the great departures from perception may be this concept of "per diem."
Many truckers think "per diem" guarantees them a deduction. You may have a per diem of $39/day for meals and $65/night for motels. The myth is that 100 nights would thus create a $3900 deduction for meals and a $6500 deduction for travel.

The taxpayer should establish what he really spent, and if he doesn't have records, try to determine what is reasonable. Most of them don't spend $39 per day, and instead of paying for a motel, they spend more nights sleeping in the cab than in a motel.

If he doesn't own his truck, he should receive a W-2. It's possible he might receive a 1099-MISC. The deduction is watered down if he has a W-2, as it becomes a 2106 and loses 2% of his AGI as an itemized deduction on Schedule A. He will receive more benefit from the deduction if he files a schedule C with the 1099, because he can directly deduct this from his income.

[Jiggers]

Per diem for lodging

The truck driver cannot use the per diem for lodging. Doesn't matter if he is an employee or self-employed. He must use actual expenses.

The per diem for lodging is for employers to pay their employees.

[Beth]

New Client:Truck Driver-Guidance please

Snaggletooth- can I use a Schedule C with a W-2? Or only if the stauatory employee is checked?

All, very helpful- thanks!

[Snaggletooth]

No Statutory Employee

Beth, a truck driver cannot be a statutory employee. There are only a very few categories, the most common being an outside salesman.

If he gets a W-2, he's stuck with the 2106 and the 2% floor. Not really fair, but other occupations such as school coaches, nurses, etc. have to put up with it too.

Regards, Ron J.

[Beth]

No Statutory Employee

Ok makes sense and re-reading your first post, I see that now. Thank you so much!