HI ALL. Sorry, your in for a shock!!!!!!!!, #1 if your a courier, and do not go more that 500 miles round trip, and you do not qualify for the Per Diem at all, you are considered a local driver, and your home every night. The mileage deduction is no problem of receiving, but it is not a refund, it is a deduction on your SCH C line 9, and I would not advise taking more that 100,000 miles. Due to a definite audit possibility you would be looking at, if you use more that the amount allowed, if it is in a cargo van only/ pickup truck w/cap 0r box, or a Cargo/Van with a 12ft box.? no other vehicles are allowed. and they have to have a GVW of under 9,995 lbs. loaded. The other item in reference to mileage which of course you have to prove on a daily basis, you cannot use the yearly beginning and ending figures. I
t must be logged on a per Day trip basis. You must log your mileage in the following format: Date- Shipper -Receiver - Beginning- Ending mileage and must be continued for each pick up and delivery for the whole day, otherwise you will not be allowed the mileage deduction if audited. YOU CANNOT TAKE THE MILEAGE FROM YOUR HOME TO THE FREIGHT TERMINAL TO PICK UP YOUR TRIP OR YOUR RETURN HOME FROM DROPPING YOUR FREIGHT BILLS AT THE OFFICE. You are only allowed the per Diem deduction if you are out for more that 24 hours. meaning if you leave your home at 2PM on a Monday, entitled to 1/2 day and do not return home until Friday night at 9 PM, you get full days for Tues, Weds, Thurs, and 3/4 day for Friday, so you would be allowed 4.25 days away from home per diem that week. But you must take a hotel room, or sleep in your vehicle / Some sort of bedding must be fixed to the vehicle for the per diem to be allowed. A Sleeping bag, cot, or built in sleeper are allowed.
If you come home every night the Per Diem is NOT ALLOWED Are you paid $.43 per mile by your courier, as a reimbursement, or are you figuring the per diem at that rate, the per diem is daily, not per mile. and its $59.00 per Day, at 80% the difference between $59.00 x80% comes to $47.20 per day and it is a reimbursement for your meals only. as a deduction on line 24 meals and entertainment, nothing else. Also on line 23 Travel is for your Motels hotels that you stay at when you over the road away from home. Also, the mileage rate is $ 56.5 per mile which is to be entered on either Auto Expense Worksheet or Form 4562 Part V. you must enter your business miles separately from your commuting or other miles that you drove on that form. and make the necessary check marks where stated. So lets take an example:
250 days away from home that you can prove at $59 per day = $14,750.00 x 80% =$11,800. This per diem amount will be calculated by the tax software and entered on line 24 The amount of mileage I would suggest to use is 98,679 miles at $56.5 per mile = $58,865 the auto expense sheet or form 4562 Part V just the business miles, you must also enter the other miles for reference on how you came up with the amount of mileage. in order for you to deduct the mileage that you are claiming it must be within reason as to the amount of your 1099 MISC that you it should not go over 20% of your gross. receive,
Franklin Katz, RTRP, ATP, PA, PB
Frank's Tax & Business Service
315 E. King St.
Kings Mountain, NC28086
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