Are van driver tips tax deductable??

[Hootie]

Your comments appreciated

[aloft]

Yes.

[Old Pete]

Only un-reimbursed expenses are tax deductible. If you are given a per diem by your employer and the per diem meets or exceeds your expenses there is no deduction.

[Hootie]

I can't find where my company says what per diem is for so it is my interpretation that it is only for food. So I guess I'll be deducting those van tips.

[Diamnd15]

those dollar bills are starting to add up

[BobDDuck]

Originally Posted by Hootie9750

I can't find where my company says what per diem is for so it is my interpretation that it is only for food. So I guess I'll be deducting those van tips.

If you look at the CONUS rates there are generally 2 categories. M&E (meals and expenses) or ME&L (meals, expenses and lodging). I'm guessing that you fall under the M&E rates and tips are expenses so they aren't deductible.

Just a WAG though.

[EDUC8-or]

Tipping van drivers can be considered part of your expenses. You can deduct meals and expenses. On the first and last days of a trip you can deduct 75% of the following rates: http://www.irs.gov/publications/p1542/ar02.html In the middle of the trip you can deduct 100% of the per diem rates.

HOWEVER BEFORE YOU DEDUCT you must calculate how much your company gives you for per diem. Then you need to look at where you overnighted and use the table on the link above to see what the IRS rate is for each city. Then do some math: If you made LESS in per diem than what the IRS rates are, you can deduct. If you made MORE you cannot deduct.

It's not going to be a lot, there is software out there that does it for around 50 bucks. It will take a while if you do it on your own, and if you only use the standard deduction it's not worth it. You can't add this to your standard deduction.

EDIT: Out and backs don't qualify because you began and ended in your base on the same day.

If this sounds confusing, it can be. You should consult your tax professional or use software that will provide assistance if you are audited by the IRS.

[seagull]

Originally Posted by BobDDuck

If you look at the CONUS rates there are generally 2 categories. M&E (meals and expenses) or ME&L (meals, expenses and lodging). I'm guessing that you fall under the M&E rates and tips are expenses so they aren't deductible.

Just a WAG though.

You aren't limited to the CONUS (or published gov't Int'l rates, as appropriate) rates. If you spend more, you can write off more. The portion of per diem that meets the gov't guidelines is tax free, the other portion is considered taxable income. It's up to you to show expenses over that amount are valid, and then you can write off those expenses against the "taxable" portion. In fact, I think (not positive) that you can deduct the entire cost of expenses that exceed the gov't rates. That is regardless of whether they exceed your entire per diem amount or not.

[wheelsup]

FWIW the tax accountant doing my taxes (www.pilot-tax.com) deducted the tips I believe. I came out about $1200 ahead of the standard deduction including the per diem discounts and several other things I had going, such as dry cleaning expenses and a lot of Goodwill giving. No mortgage interest though.

At the regional level, I don't know any company that pays the minimum government rate, so you always come out ahead.

What software can calculate the per diem taxes for you? The place I had my taxes done did it for me, but I plan on doing my own taxes next year following their example. I hear some of the more advanced Tax Cut or Turbo Tax software has this stuff included.

[kellwolf]

I used the chart for my taxes this year, and I came in WAY under the feds on per diem. Netted a pretty decent deduction. You do have to keep track of the stuff though, especially if you do high speeds. Even though you spend the night in a hotel, a high speed is still considered starting and ending in base.