How will the Tax Cuts and Job Act Impact OTR Truck Drivers?

On November 16, 2017 The U.S. House of Representatives passed H.R. 1 “Tax Cuts and Job Act”[1]. The U.S. Senate has released a companion tax overhaul bill that is scheduled for debate in the coming weeks. The House bill proposes 4 tax brackets and the Senate 7, but both bills propose among other things eliminating the deductibility of unreimbursed business expenses for employee truck drivers. In general, under both the Senate and House proposals company OTR drivers that previously claimed itemized deductions for unreimbursed expenses will experience a tax increase.

Example – Single Driver: OTR driver Wayne earned $50,600 in 2016. He filed his tax return as single and claimed itemized deductions of $21,038, which included $14,868 of net per diem, $4,840 for cell phone, tools, GPS unit, etc. and $1,893 of state income taxes. His tax bill will increase $1,052 under the Senate plan and $1,243 under the House plan.

What would the impact be on Wayne if he was married? The tax overhaul increases his tax bill by $ 469 under the Senate plan and $850 under the House plan.

This article was written by Mark W. Sullivan, EA, who has been providing taxpayer advocacy, consulting, and litigation services since 1998.   Mr. Sullivan has over a decade of experience advising transportation industry clients in per diem issues.

Please remember that everyone’s financial situation is different. This article does not give and is not intended to give specific accounting and/or tax advice. Please consult your own tax or accounting professional.

 Copyright 2017 Per Diem Plus, LLC. Per Diem Plus proprietary software is the trademark of Per Diem Plus, LLC.

[1] https://www.congress.gov/congressional-report/115th-congress/house-report/409/1