Glossary · Tax & Accounting
Per Diem.
Daily meal & incidental expense allowance ($69 in 2026) that truck drivers can deduct from taxable income; 80% deductible for transportation workers.
What it is
Per diem is the daily meal and incidental expense (M&IE) allowance the IRS lets truck drivers deduct when they're working away from their tax home. The 2026 IRS rate is $69 per day within the continental US, and $74 per partial day on travel-start and travel-end days. Transportation workers — truckers, airline crews, mariners — get a special carve-out under IRC Section 274(n): the deduction runs at 80% of the daily rate, not the 50% that applies to other businesses entertaining clients over meals.
Self-employed owner-operators claim per diem on Schedule C. W-2 company drivers cannot deduct per diem out-of-pocket under the Tax Cuts and Jobs Act (TCJA, 2018–2025), but many carriers offer "per-diem pay" programs that route a portion of W-2 compensation as a non-taxable reimbursement instead. The deduction requires staying overnight away from the tax home on business; it cannot be claimed for partial-day local trips or for drivers who have no fixed tax home.
Why it matters for trucking finance
For an owner-operator running 250 days per year away from tax home, the per diem deduction works out to $69 × 250 × 80% = $13,800 of taxable-income reduction — a meaningful tax savings at a 22% federal + 15.3% SE marginal rate, roughly $5,150 back in the operator's pocket. Failure to track per-diem days properly costs operators thousands annually in unclaimed deductions. Logbook records (paper or ELD) documenting overnight stays away from tax home are the audit defense. Lenders rarely care about per diem directly, but tax returns showing strong gross revenue with proper deductions signal an operationally mature business.
Related terms
- Tax Home — IRS-defined principal place of business; for truckers, typically the home base or domicile where the driver lives between trips.
- Self-Employment Tax (SE Tax) — 15.3% federal tax on net self-employment income (12.4% Social Security + 2.9% Medicare); paid by sole proprietors, partners, and LLC owner-operators.
- Schedule C — IRS Form 1040 Schedule C — Profit or Loss from Business; used by sole-proprietor owner-operators to report business revenue, expenses, and net profit.
- Mileage Log — Daily record of miles driven, route, purpose, and odometer readings; required for tax deduction support and IFTA reporting.
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