How can I find proof that per diem is legal?
On Friday, Aug 19th, I had the pleasure of being a guest on Road Dog Radio with Grace Sharkey. During the show we had a caller named Jessie ask for proof that he could show the trucking company he is working for that per diem is legal. Jessie recently started driving for a different company that doesn’t pay Per-Diem. as a truck driver, he could benefit from it again at his new job. Well Jessie, thanks for calling, and here we go!
First a real quick refresher on what Per-Diem is
Per Diem is Latin for “by the day.” In the federal tax world, it represents the expense that an employee would have from working away from home or out on location. Expenses like food, showers, and toiletries. Every employee working out of the location is entitled to up to $69.00, 80% of which can be written off for income tax purposes.
Is Per Diem legal?
As long as you follow the rules given by the IRS, YES! It’s 100% legal!
IRS Revenue Procedure 2019-48 talks about miscellaneous deductions. On page 12, section 4, subsection .04 we get to the special rules for the transportation industry. Here they define who is eligible and provide examples of how it works. Please note they use $59 per day which was the rate at the time. It has since been updated to $69 per day in the revenue procedure listed in the next paragraph.
IRS Revenue Procedure 2021-52 talks about the most current rates in Section 3 on page 2. The first sentence spells out the current $69 per day allowance.
As I said before Per Diem is legal as long as you follow the rules given by the IRS. The IRS also has rules on how you pay it out to your drivers. We have those rules outlined here.
Hopefully, this article helps Jessie convince the trucking company that he works for to start paying per diem. Thanks again for calling into the show Jessie.
More information on Per Diem
Written by Mike Ritzema
With over 20 years of experience in entrepreneurship, management, business planning, financial analysis, software engineering, operations, and decision analysis, Mike has the breadth and depth of experience needed to quickly understand entrepreneurs’ businesses and craft the most suitable solutions.
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