The Internal Revenue Service increases the per diem in 2006, meaning truckers can deduct more from their federal income taxes for each day they’re on the road. For 2006, the per diem jumps to $52 a day, and the percentage of that an individual can claim as a deduction increases to 75 percent, meaning a deduction of $39 per day. The claim allowance goes to 80 percent in 2008. The 2005 rate was 70 percent of $41 per day.
The per diem rate requires no documentation other than log books. It approximates the amount spent daily on meals and other over-the-road expenses. Truckers who forgo the per diem and calculate their actual meal expenses using receipts also can deduct 75 percent in 2006, but most find claiming the per diem much easier and more profitable.
The IRS plans eventually to allow truckers once again to deduct 80 percent of their daily meal expenses, as was common years ago, said Bob Pitcher, ATA vice president of state laws. “Then came the astonishing revelations of three-martini lunches among businessmen, and this was cut back to 50 percent,” Pitcher said.
Trucking fleets complained that the 50 percent rule was not fair to truckers. “Their employees were required to be on the road constantly, were not likely to spend extravagantly at truck stops, and were subject to DOT hours-of-service rules and other regulations that restricted their schedules to an extent,” Pitcher said. Congress agreed to phase back in the 80 percent deduction for workers subject to hours-of-service rules, increasing the allowable amount by 5 percent every two years, he said.
For more information, consult a tax preparer or financial services provider, or read IRS Publication 463.