Tax Overhaul Impact: OTR Company Drivers

In general, under “Tax Reform and Jobs Act” company OTR drivers that previously claimed itemized deductions for unreimbursed employee expenses will likely experience a tax increase[1]. The following tables are designed to assist OTR employee truck drivers in evaluating the impact of the Tax Reform Act passed into law on December 22, 2017.

Single Driver
Example A: Earned $50,000 in 2017 and claimed itemized deductions of $21,601, which included $14,868 of net per diem[2], $4,840 for cell phone, tools, GPS unit, etc. and $1,893 of state income taxes. Your tax bill will increase $1,034.

Example B: Earned $50,000 in 2017 and claimed the standard deduction of $6,350. Your tax bill will decrease $1,309.

OTR Driver Tax Act Single Filing Status Table 1

Married Driver – No Dependent Children
Example A: Earned $50,000 in 2017 and claimed itemized deductions of $21,601, which included $14,868 of net per diem, $4,840 for cell phone, tools, GPS unit, etc. and $1,893 of state income taxes. Your tax bill will increase about $475.

Example B: Earned $50,000 in 2017 and claimed the standard deduction of $12,700 with no dependent children. Your tax bill will decrease about $717.

OTR Driver Tax Act Single Filing Status Table 2

This article was written by Mark W. Sullivan, EA, who has been providing taxpayer advocacy, consulting, and litigation services since 1998. Prior to starting a private practice, Mr. Sullivan was an Internal Revenue Officer with the New York, NY, Saint Louis, MO and Washington, D.C. offices of the Internal Revenue Service. He has over a decade of experience advising transportation industry clients with respect to 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 2018 Per Diem Plus, LLC. Per Diem Plus proprietary software is the trademark of Per Diem Plus, LLC.® 

[1] Under H.R. 1 “Tax Cuts and Job Act” OTR employee truck drivers will no longer be allowed a tax deduction for unreimbursed business expenses, which includes “meal expenses that take place during or incident to any period subject to the Department of Transportation’s “hours of service” limits” and miscellaneous expenses.

[2] In accordance with IRS Revenue Procedure 2011-47 Sec 4.04 (superseded most recently by Notice 2017-54) covers meals and incidental expenses only. A driver can deduct 80% of per diem.

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