Per diem for truck drivers is a way to deduct meal expenses while on the road. Because truckers spend so much time away from home, the IRS provides a simplified method so you don’t have to save every fast food receipt from every truck stop across the country. Instead of tracking actual meal costs, you use a flat daily rate based on where you were that day.

The current standard federal meals and incidental expenses (M&IE) rate is $69 per day for most locations, though certain high-cost areas have higher rates. For transportation workers, including truck drivers, the IRS allows you to deduct 80% of that rate rather than the usual 50% that applies to most business meals. So for a standard location, you’re looking at $55.20 per day in deductible expenses. Over 250 nights on the road, that adds up to nearly $14,000 in deductions.

The critical rule is that you must be away from your tax home overnight. Day trips don’t count. Your tax home is generally where your main place of business is located, not necessarily where you live. If you leave in the morning and return the same night, that day doesn’t qualify for per diem. Only the days where you’re sleeping away from home in a truck cab, hotel, or anywhere else on the road count toward the deduction.

How per diem works depends entirely on whether you’re an owner-operator or a W-2 company driver. Owner-operators claim per diem as a business deduction on Schedule C. It directly reduces your taxable income and your self-employment tax. W-2 drivers cannot deduct per diem on their personal tax returns since the 2017 tax law changes eliminated unreimbursed employee expense deductions. W-2 drivers can only benefit from per diem if their employer pays it through an accountable plan, where the per diem amount is excluded from taxable wages.

Tracking is where most drivers fall short. You need a logbook or record showing each day you were away from your tax home overnight. The record should include the date, the city or location where you stopped, and confirmation that you were away overnight. ELD (electronic logging device) records work well as supporting documentation since they already track your location and hours. Some drivers keep a simple spreadsheet updated weekly. The method doesn’t matter as long as the information is there and consistent.

In your bookkeeping software, owner-operators should record per diem as a meals expense. Create a category specifically for per diem so it’s easy to identify and calculate at year end. Don’t mix it with other meal expenses. At the end of each month or quarter, tally the qualifying overnight days from your logbook, multiply by the applicable daily rate, and record that amount. For trucking companies paying per diem to W-2 drivers under an accountable plan, the payments get recorded as a non-taxable reimbursement rather than wages.

One common mistake is claiming per diem for partial days without understanding the rules. The IRS allows partial per diem for your departure and return days using either 75% of the daily rate or a calculation based on when you left or arrived. Another mistake is failing to keep any logbook at all and just estimating days at year end. If the IRS questions your per diem deduction, estimated totals without supporting records won’t hold up.

If you’re running an owner-operator business and want to make sure per diem and other deductions are captured correctly, our Orange County small business bookkeeping services can help you set up a tracking system that makes tax time straightforward instead of stressful.