5 minute read

The per diem deduction for truck drivers is one of the most consequential line items on a Schedule C or single-member LLC return — and one of the most frequently miscalculated. The governing statute is 26 U.S.C. §274(n); the procedural framework is Rev. Proc. 2019-48; and the current rates are set by IRS Notice 2025-54, effective for travel on or after October 1, 2025. If you are not applying these rules with precision, you are either leaving deductions on the table or exposing yourself to audit risk.

Per Diem Deduction Truck Drivers: The Statutory Framework

Section 274(n)(1) imposes a general 50% limitation on meal expense deductions. Section 274(n)(3) carves out a more favorable rule for individuals subject to Department of Transportation hours-of-service regulations: those taxpayers may deduct 80% of otherwise allowable meal and incidental expenses (M&IE). This is not a guideline — it is a statutory preference built specifically for DOT-regulated drivers.

The IRS operationalizes the 80% rule through annual per diem notices. Notice 2025-54 supersedes Notice 2024-68 and establishes the special transportation industry M&IE rates at $80 per day for CONUS travel and $86 per day for OCONUS travel. These figures did not change from the prior notice period. The $80 domestic rate was itself a significant increase from the $69 rate in effect before October 1, 2024.

Applying the 80% Limit in Practice

At $80 per CONUS travel day, the actual deductible amount per full day is $64 ($80 × 80%). For a driver away from home 250 days in a tax year, the gross M&IE per diem is $20,000; the Schedule C deduction is $16,000. At a 25% combined federal and self-employment effective rate — itself a figure worth calculating carefully given the mechanics explained in our post on self-employment tax for owner-operators — that $16,000 deduction produces approximately $4,000 in tax savings. Leaving it off your return because your bookkeeping is informal is a material error.

Qualification Requirements and the Tax Home Rule

Who Qualifies

Under Rev. Proc. 2019-48, a “transportation industry” worker is someone whose work directly involves moving people or goods by airplane, barge, bus, ship, train, or truck, and who is subject to DOT hours-of-service regulations. Meeting both prongs is required to access the 80% rate rather than the standard 50%.

Tax Home and Away-from-Home Tests

IRS Publication 463 (2025 edition) — available at irs.gov/publications/p463 — establishes that a deductible travel expense requires a tax home and that the driver must be away from that tax home overnight in a manner that requires sleep or rest to meet work demands. A brief rest in the cab qualifies; a nap does not satisfy the rest requirement in isolation.

Publication 463 sets out three tax home tests, of which a driver must satisfy at least two: (1) performing part of business in the area of the main home and using that home for lodging while doing business there; (2) having duplicated living expenses because business requires absence from home; (3) not having abandoned the area of the main home, having family members there, or regularly using the home for lodging. Drivers who are genuinely domicile-free — no fixed residence, no duplicated expenses — may have no deductible per diem at all, regardless of days on the road.

Recordkeeping, Partial Days, and the Incidentals-Only Rate

The Four Substantiation Requirements

Claiming per diem under Rev. Proc. 2019-48 does not eliminate the need for records. You must be able to document:

  • The date and location of each travel day (a log or load manifest serves this purpose)
  • That the destination was away from your tax home
  • The business purpose of the travel
  • That you are subject to DOT hours-of-service regulations (your operating authority or driver record establishes this)

Partial-Day Proration and the $5 Incidentals Rate

On departure and return days, the widely accepted method — referenced in both Publication 463 and Rev. Proc. 2019-48 — is to apply 75% of the applicable M&IE rate before then applying the 80% §274(n) limit. For a CONUS partial day: $80 × 75% = $60; $60 × 80% = $48 deductible. Failing to prorate is a minor exposure; failing to apply the 80% cap at all is a significant one.

Separately, Notice 2025-54 sets the incidental expenses only rate at $5 per day for any CONUS or OCONUS locality. This flat rate — unchanged for years — applies when a driver has already had meals provided and wishes to deduct incidentals alone. Critically, the $5 incidentals-only rate is not subject to the §274(n) meal limitation and is deductible in full.

Integration with LLC Bookkeeping and Tax Filing

For a single-member trucking LLC taxed as a sole proprietorship, per diem is reported on Schedule C, Line 24b (meals subject to limitation). The system automatically applies the applicable limitation percentage — but it applies 50% by default unless the preparer or software overrides it to 80% for DOT-regulated transportation workers. This is the most common preparatory error. Confirm with your CPA that the correct rate is applied, or verify the output against the IRS guidance for small businesses and self-employed taxpayers.

Per diem is also a variable that materially affects load-level profitability. If you are not allocating M&IE costs to individual loads before calculating net margin, your cost-per-mile is understated. This integrates directly with the depreciation analysis covered in our post on Section 179 and bonus depreciation for trucking, with estimated tax planning covered in our guide on quarterly estimated taxes and Form 1040-ES, and with the authority questions that arise when operating under lease in our post on what owner-operators get wrong about their operating authority. Keep your documentation as organized as your post-accident paper trail — both can be subpoenaed.

Track every load’s income and expenses automatically: Easy All-in-One Trucking Load and Expense Tracker — The Trucker Codex

This content is for educational purposes and does not constitute legal, tax, or accounting advice. Rules, thresholds, and deadlines referenced above are subject to change — verify current requirements with a licensed CPA, tax attorney, or the issuing agency before acting.

Updated:

You May Also Enjoy