The majority of U.S. truck drivers are treated as self-employed for tax purposes. This means you receive a 1099-MISC at the end of the year for your non-employee compensation. Whether you may claim an expense for per diem reimbursements on your tax return depends on how your 1099 income is accounted. In some cases, you may be able to claim per diem, even when you are reimbursed, and in other cases you may not.
Per diem is a rate set by the Internal Revenue Service to cover your meals and incidental costs while traveling on the road. Most employees may deduct up to 50 percent of an eligible meal's cost; however, truckers may deduct up to 80 percent. Per diem is calculated on a daily basis and should account for all meals purchased during the day. You may only receive per diem on work days, also referred to as “days out." The IRS changes the per dIem rate on a periodic basis. Consult the “Meals” section of IRS Publication 463 for the rate that applies to a specific tax year. As of 2010, the per diem rate for truck drivers is $59 per day when traveling within the United States and $65 per day when traveling outside the United States.
1099 – Gross Income
Some trucking companies list the gross amount of compensation paid to truck drivers on 1099 forms. This is the amount the company paid you before expenses, although the amount you actually receive in compensation may differ. Many truck companies take certain payments out of checks, such as truck lease payments, per diem reimbursements, fuel, weigh scale fees and other incidental costs. At the end of the year, the accounting department must provide an itemized breakdown of your compensation. Look at the compensation amount shown on your 1099. If the amount is the same or close to the gross amount, you must report the gross income and deduct all the expenses the company already took out of your check on your tax return. This includes per diem reimbursements.
1099- Net Income
Some trucking companies list the net income on year-end 1099 forms. The net income is the amount of your compensation, minus expenses. To determine if your 1099 reflects net amounts, look at the itemized compensation and expense statement the trucking company gives you at the end of the year. A gross compensation amount appears at the top of the statement, and expenses are broken down by category and subtracted from the gross amount. If your 1099 compensation is the same as or close to the net amount, the company has already taken into consideration your expenses. You may not claim per diem reimbursements on your tax return when you receive net income 1099s. This is because the benefit of the deduction is already accounted.
Claiming Per Diem
If you’re eligible to claim per diem expenses on your tax return, you must first multiply the per diem rate by your number of days out, and then multiply the result by .80. This is the amount you may claim as a deduction. The 1099 income must be reported on IRS "Schedule C, Profit or Loss from Business." Claim your per diem expense on Line 24b. You must also report your 1099 income and other expenses on "Schedule C" and attach the form to your 1040 income tax return.