Trump’s Trucking Cuts and Jobs Act (TCJA)

By RUSS J. ALAN

On Tuesday, Feb 5^th,  former minority leader of the Georgia State House of Representatives and democrat and loser of the 2018 Georgia gubernatorial election Stacey Abrams gave the democrat response to President Trump’s State of the Union Address.

While Conservatives do not agree with Stacey Abrams’ positions and agenda, nor her party, they will have to agree that, whether she knew the reason or not, one of her statements was correct:

“We owe more to the millions of everyday folks who keep our economy running: like truck drivers forced to buy their own rigs…”

Abrams was ridiculed and laughed at a lot for this particular statement, but I am about to show you why 3.2 million over-the-road (OTR) truck drivers WILL be forced to buy or lease their own trucks to make it worthwhile to even continue in the profession, if they even want to do it anymore at all.

After all the Department of Transportation (DOT) “tweeks” and screw tightening to truckers and the trucking industry over the last decade, while diesel exhaust fluid (DEF), mandatory electronic logs and driver-facing cameras inside trucks almost but didn’t quite cause a mass truck driver exodus, the taking away of $10,000 or $12,000 of their deductions could kick it off beginning NOW in 2019.

Officially called the Tax Cuts and Jobs Act, Trump’s tax reform plan, which he touted as an across the board tax decrease, was not that at all.  While it decreased many lower income people’s taxes, it raised many people’s taxes, and while it will indirectly create jobs and new industries, it will also close certain companies and end, or force drastic changes to, certain industries such as transportation.

The transportation industry will be directly impacted by this new tax plan.

Have you completed your tax return? Did you get a refund? Did your taxes decrease? You have until April 15th to get it to the IRS, but you may want to go ahead and take a look – especially if you are a truck driver.

Many deductions were eliminated.

Many who have mortgages and property tax who always used to be able to itemize deductions are having to take the flat standard deduction because the flat standard deductions were doubled beginning when they file this time, although personal and dependent exemptions were eliminated.

Millions of traveling employees who used to get a deduction on their Schedule A for their travel expenses found out they can no longer deduct those expenses. 3.2 million over-the-road (OTR) truckers who are “company drivers”, those who don’t own their own trucks and receive forms W-2 from their employers to report income taxes paid during the year, used to be able to deduct a flat $63 Meals and Incidental Expenses  (M&IE) rate per day (IAW Publication 463 “Special [M&IE] Rate for Transportation Workers”) for every night they were away from home (most stay on the road 24-26 days per month), but now can no longer claim this deduction.

The aforementioned company OTR drivers used to file the daily flat M&IE deduction, along with their other many expenses incurred in order to perform the job, on Form 2106, “Employee Business Expenses“, but now that form can only be used by members of the armed services, government employees and performing artists.  While the  M&IE deduction rate was increased to $66 per day, employees are not allowed to deduct it.  Because  it must now be filed on a Schedule C, “Self Employment Tax“, a form only business owners or independent contractor employees who get a 1099 instead of a W-2 from their employers at the end of the year can file, so now only owner operators who own their own trucks can get the $66 daily deduction that ALL OTR truckers used to be able to file. Hundreds of thousands of truckers who pay mortgage interest, property taxes and state and local income taxes, are finding out they owe taxes for last year, because without the M&IE rate, which used to be an itemized deduction, most  take the flat standard deduction, because it exceeds their totaled allowed itemized deductions. 

These federal tax changes not only hurt truckers, but all other transportation workers, i.e., ship crew members, railroad crew members, airline flight crew members including flight attendants. 

Not only are transportation workers adversely affected by the Republican 2018 federal tax changes.  Traveling sales people, executives, etc. are also financially hurt.  In fact, ANY employee who has unreimbursed expenses such as special footwear, clothing, tools (as mechanics do), etc. can no longer deduct those expenses, unless at the end of the year from their employer  they receive a 1099 form instead of a W-2.

Dear President Trump:  When deductions are eliminated, it’s a tax INCREASE not a decrease.

© RUSS J. ALAN