TFS Online Newsletter

After the Tax Reform Act of 1986 the IRS published 240 new and revised forms to implement TAX REFORM SIMPLICITY. It ain't got any better since!

You ain't gonna believe this ( another truck driver story). Today a woman called me. She and her husband are Owner Operators leased to a fairly good company out of Iowa. They live in Wisconsin. Now the good stuff! They have their taxes done by a CPA, (you know them high-priced persons that has an H & R Block reject in the back room doing the work). He will only allow them $26 a day for the STANDARD MEAL ALLOWANCE, (per diem) because they live in Wisconsin. Then she tells me what a nice guy he is and he SEEMS to know what he is doing. Why did you call me then? So I explain that there is a special allowance for TRUCKERS and it is $32 a day. Fast calculation $12 a day times 300 days equals about $3600 times 50% comes out too about $550 in over paid taxes.

Then I told her that the law went in to affect in 1989 for $30 and changed to $32 March 11, 1993. Wouldn't you know it they had never been able to deduct that much? BECAUSE THEY LIVE IN WISCONSIN!

To make a long story shorter, she kept telling me what a nice man he was, and on and on and on. So I told her she was wasting my time. They would continue to go to him and get their taxes done. Then she said, "Oh well you can only deduct 50% of the allowance anyway." Thank you very much for calling, good by!!!

If that CPA didn't know that there is a special STANDARD MEAL ALLOWANCE for truckers, what else doesn't he know about truckers? How about you?

I was asked to be in a debate on the INTERNAL REVENUE SERVICE and income taxes. The debate was at a monthly meeting of Accountants. I of course was against the IRS and income taxes. The debate lasted for ninety minutes. Do you know how much yelling I can do in ninety minutes? Just before it was over a man stood up and said, "How do we expect the Congress, made up of 525 people to agree on something like the tax system when the two of you, both intelligent men, could not agree?" Then my opponent made a final statement. Something to the effect that 800,000 IRS agents would be out of work, and so would we. My commit... "I will go out and get an honest job."

IRS Publication 334 has 13 pages to tell you how and what you can deduct for TRAVEL, ENTERTAINMENT, AND GIFT EXPENSES. Then it lists four other publications to help you understand the rules. In every one of these publications it either tells you or refers you to a place that tells you that the STANDARD MEAL ALLOWANCE for truckers is $32 a day. If you read them and understand them you will know that you can deduct for showers, and for doing your laundry. In fact any expenses that you spend on, in. or around your truck are deductible. Well there are a couple of exceptions. But if you get caught doing them maybe you too, can become famous and make movies.

If you travel outside the United States the Allowance is $36 a day. The only requirement to deduct this allowance is KEEP RECORDS! If you plan to deduct an expense, you must keep timely and accurate records, you will have support to show the IRS if your tax return is ever examined.

The IRS says. You must be able to prove (substantiate) your deductions for travel, entertainment, business gift, and transportation expenses. You should keep adequate records or have sufficient evidence that will support your statement. Estimates or approximations do not qualify as proof of an expense.

In this age when the IRS has chosen truckers to be their favorite audit subject, recordkeeping is essential. Your log book, an envelope, or 12 envelopes, and a calendar book are the basis of your record keeping system.

Your log book tells where, when, and why. That in itself should be sufficient, but it ain't. I have never met an IRS agent that can understand, let alone read a log book. Next put all receipts, except meal , into an envelope. Keep it with your log book. The Best is a calendar book. There are hundreds to choose from. Each morning write down your location, if home write HOME. Use this to log all cash expenses where you do not get a receipt. Your laundry, cash phone calls the locations and amounts. The IRS excepts this, if it is written at the time of the expense.

There are four things the IRS require to prove an expense and to be able to deduct it. Amount of each separate expense for travel, lodging, and meals, (unless you claim the standard meal allowance). Incidental expenses may be totaled in reasonable categories, such as taxis, cleaning supplies, and other like things. You must show the date you left and returned for each trip and the number of days for business. You must show the name of city or other designation. Then you must show the business reason for travel or the business benefit gained or expected to be gained.

These rules are for everyone that travels, not just truckers. Truckers do have some expense deductions that the general public traveling on business can't deduct.

Don' t get caught up in the stupid assumption that is passing through truck stops and some books that you do not have to keep receipts for expenses under $25. Don't believe it. KEEP THAT RECEIPT. Any questions call me. 1-800-32TAXES.

It may sound like it is stupid and takes to much time. Not so. I can tell you from experience. I started driving in 1968. I have a note pad sheet for every day I drove. It shows mileage at midnight, statelines, deliveries, and pickups, how much fuel, and how much money I spent each day I drove a truck. My wife says she is going to cremate me with all that paper!

Think that is nuts? Hank Goode, use to be with Garretta and drove the HIGHWAY HILTON, he has the same thing but in binders on the top bunk of his KW. Oh well hank only made a lot of money because he knew where he had been, where he was going, and where he was. Now he is driving a truck in Europe. So much for the reasons to keep records.

Don't look now but for 1997 the STANDARD MEAL ALLOWANCE IS $36 a day.

HAPPY MOTORING AND I WILL... SEE YOU AT THE TOP.

RUSSELL E. FULLINGIM, CTP