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PER DIEM COMPUTATION FOR DOT TRUCKERS


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#1 Edward

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Posted 07 November 2010 - 03:32 PM

Have a problem with a client that came to me for review of his 2009 tax return. It appears the other preparer computed the total DOT per diem amount by merely reducing 365 days by the number of days the driver WAS NOT DRIVING (sick, at home, or while truck was being repaired, etc) which totaled 56 days, leaving 309 days x 59.00 x 80% = $14,585. net DOT per diem placed on the return. I say this computation is totally incorrect. Because the drivers must take REST STOPS in accordance with DOT "HOURS OF SERVICE" rules, he should have maintained a written record documenting DATE, TIME AND PLACE of such REST STOPS. Then the resulting figure would be multiplied by 59.00 x 80% to arrive at the correct amount of per diem. This could greatly affect his total per diem as the truckers do have many days of down times like stop/wait times, sick time, at home, truck repairs, and many other NONE REST reasons while on the road which would not qualify for the DOT per diem rate. Am I correct on this assumption? Will appreciate any comments. Thanks.

#2 cathyan

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Posted 07 November 2010 - 08:27 PM

I use their log books to determine the days out, which include lay-overs out of town. Using the books, you can tell when they left and when they got back. Usually they day they leave and the day they get back are counted as part days, not full. If the truck breaks down while they're out on a run, even if it takes 3 days to fix, those are still considered days out. It's the days away from home ON BUSINESS that matter.

#3 TAXBILLY

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Posted 08 November 2010 - 06:51 AM

I've trained the few truckers that I have to maintain the records required if they want to take the deduction. I don't enable them because they will never follow through on their promise "I'll keep the records for next year for sure but could you just estimate it for me this year?"
taxbilly

#4 mcb39

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Posted 08 November 2010 - 10:27 AM

My guys (and gals) are very good about logging their days out. As Taxbilly said, it is our job to train them. And, the prior post is correct in that days down while on the road overnight away from home count as per diem days. The day of departure and the day of return are usually partial days.

#5 Edward

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Posted 08 November 2010 - 10:59 AM

So the computation is fairly simple, like counting TOTAL days away from home PLUS the 3/4 day when departing and when returning as Cathyan states above. The driver I mentioned says he returned home seven times during 2009. Thus we take the total count based on these days THEN reduce by the time he spends at home/vacations and then proceed with the resulting number of days times the 59.00 x the 80%. I suspect the drivers can scan their trip reports and come up with the needed figures in moments? Thus, I was wrong in my initial assumptions..

Edward

#6 MAMalody

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Posted 08 November 2010 - 01:18 PM

I would recommend sticking to log books for any counts being done. My experience with the IRS is that they do not start with 365 days and allow you to reduce per your memory/etc. They usually request to see the logs and count the actual days the logs support. Then they would entertain any exceptions to the logs that you may present. I also agree that the day of departure and return are normally partial days. I thought there was an MSSP or audit guide the IRS had on this but I can't seem to find it.

#7 Edward

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Posted 10 November 2010 - 06:58 PM

I plan on using the following format for dealing with such truckers in the future. Any comments would be appreciated. It is rather detailed but should provide needed important info for the truck drivers:

a. Opening Odometer:
b. Closing Odometer:

TOTAL MILES TRAVELED FOR YEAR:

c. Number of TIMES returned HOME:

d. Number of DAYS in regards to c. above:

e. TOTAL vacation days at HOME:

#8 jainen

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Posted 10 November 2010 - 08:01 PM

>>It is rather detailed<<

In my opinion, those are the wrong details. They do not support the location, time, and business purpose of the days traveling. You might think the result is the same whether you add the days or subtract the non-days, but it is NOT the same to the IRS. Trucking is a professional activity and requires professional records.

#9 SunTaxMan

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Posted 10 November 2010 - 08:35 PM

Jainen, I don't think the location (for DOT HOS drivers) is relevant. What is relevant is "away from home." WHERE is irrelevant, unless their trip(s) take them out of the US, when OCONUS Per diem rates apply instead of CONUS rates.

Edward, For anything other than a pick up truck or passenger vehicle, the odometer is irrelevant. DAYS AWAY is the critical component. The odometer is relevant for the Owner/Operator, for the sake of revenue per mile, and IFTA, but not for the per diem.

For per diem purposes, may I suggest a "trip log" kept by the Driver for each trip:

"Date Left home --- Time left home --- Date returned home --- Time returned home."

Then:

1. From this "trip log," either they or I calculate the "days away" and,
2. Their "Drivers Daily Log Book" is retained and used as the legal backup for their trip log.

One other thought, DOT uses the definition of "home" as the home terminal or where the truck is parked (where "On Duty" begins and ends for the purpose of the Driver Daily Log Book) while the Driver is at home, off duty. IRS uses the definition of "home" as "tax home" - where the Driver LIVES. So I encourage Drivers to calculate (and record) the time they left, and arrived back at, their residence, not the time they arrived at the truck terminal and left it. This means for the sake of the per diem, commuting TIME is included. (Recognizing that commuting "miles" are never included when calculating business miles.) this "commuting time" becomes more valuable if a Driver lives a great distance from his terminal - I know Drivers who live a hundred, or several hundred, miles from the terminal. I met a Driver for Academy MotorCoach Company in North Jersey, who lived in Colorado. He "commuted" to North Jersey, usually, only two or three times a year - he literally lived on the road -- but I never considered the possibility that he would not have a tax home ??? (I don't do his taxes!)

IF a Driver decides to take a "vacation" -- several days layover, for PERSONAL reasons (the beach, skiing, hunting, girl friend, etc.), at some location away from home, I encourage them to adjust their log of trips (above) accordingly. There must be BUSINESS reason for the time away from home in order to apply the per diem. So, "waiting for a load" or "breakdown" or "waiting for a permit" is a qualifier for the per diem.

#10 Pacun

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Posted 23 January 2011 - 12:24 AM

I noticed that Jainen logged on yesterday but hasn't posted any comments. I was investigating if someone insulted him on his last posts but I didn't find anything.

By the way this is a very nice post and I wanted to bring it to the top.




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