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Tax Problems for Truckers

The Tax Cuts and Jobs Act (TCJA) has been a mixed bag for taxpayers, with some benefiting and others paying more in taxes. One group of taxpayers that is paying more in taxes under the TCJA is truck drivers, specifically company drivers who are not owner-operators.

Elimination of Employee Expense Deduction

The TCJA completely eliminated employee expense deductions. For many employees, this was a small price to pay in return for a bigger standard deduction, lower tax rates, and increases to the Child Tax Credit.

But employees who took a large amount of employee expense deductions are actually worse off now. The other changes made by the TCJA don’t offset the elimination of these deductions.

Truckers could take a per diem deduction for all of their unreimbursed expenses under prior tax law. Because some truckers can spend up to 300 days or more on the road each year, this was a very important tax break.

The TCJA totally eliminated this deduction. Many truckers who typically received refunds were shocked to find out they owed thousands in taxes when they filed their 2018 tax returns.

Company drivers will continue to pay more in taxes in the coming years unless changes are made to the current laws. Some trucking companies may increase the per diem pay that drivers receive so that drivers don’t need to pay these amounts out-of-pocket now that the deduction is no longer available.

Back Taxes, Penalties, and Interest

If you are a truck driver in this situation, there are several things you should do to minimize the financial strain of the new tax laws:

  • Increase your tax withholdings to reflect the new tax laws. Your take-home pay from each paycheck will go down, but you won’t face as large of a tax bill when you file your taxes next year.
  • Determine how much you can afford to pay towards your taxes right now.
  • If you owe more than you can afford to pay, talk to a tax attorney about negotiating a payment plan, requesting penalty relief, or other options.

Act now to get a handle on your tax problems before you fall further behind. A tax attorney can help you explore all of your tax resolution options.

Out tax attorneys can help you negotiate the best possible tax settlement or payment plan. Call The Gartzman Law Firm at (770) 939-7710 now to schedule your consultation.