News, Interviews, and Happenings From The Trucking World
Car-truck crash fatalities continue to increase
Friday Short Haul - Amazon's fleet of day cabs, legislator's disclosure, WTA petition
ATA chief takes on truck-accident lawyers
Lonely on the road? Get a furry friend
Friday Short Haul - Lab-grown meat, fraudulent freight brokering, FMCSA HOS committee, FMCSA Clearinghouse
UPS takes giant leap in its drone delivery program
Female drivers are safer bet for trucking companies
Friday Short Haul - Embark gets financing, FMCSA announces safety grants, Covenant exits Mexico routes, and trucking statistics
Emissions standards battle heats up between the EPA and California
Smog checks in the future for California truck drivers
Friday Short Haul - Volvo Dynamic Steering, Meals for 18 Wheels, speeding crackdown, OOIDA opposes legislation
Telematics could be insurance-premium-saving boon for fleets
54 percent of survey respondents still not impressed with telematics technology
Friday Short Haul - Walmart video, it's churn, not shortage, California's independent contractor bill, hemp drivers plea
TCA honors three Highway Angels
Now they're talking about "smart" trailers
Friday Short Haul - Detention-time comments, truck orders decline, diesel fuel shortage
Berkeley study says reducing independent truckers can alleviate climate change
Clearing up concerns about the drug and alcohol clearinghouse
Friday Short Haul - Hurricane Dorian, Speed limiter bill, Thank a Driver campaign
Georgia jury awards $280 million for truck-driver-caused multi-fatality
Friday Short Haul - New eCascadias, Top cities for truck driver jobs, Push against driverless trucks
Decision on California drivers' employee/contractor status coming down to the wire
UPS jumps on autonomous bandwagon with TuSimple investment
FMCSA publishes proposed HOS rule changes
Fleets, drivers coming to like automated manual transmissions
CVSA asks for new truck crash study
Friday Short Haul - HOS revisions delayed, AEB mandate proposed, Koch sued for sex discrimination
Kodiak Robotics takes lead in autonomous truck industry race
New York City combats rash of cyclist/truck clashes
Friday Short Haul - CRST wins lawsuit, OOIDA opposes insurance hike, UPSNav
Mechanics shortage equals driver shortage in intensity
DOT announces almost 1$ billion in grants to fix infrastructure
Friday Short Haul - DOL on sleeper pay, UPS drone delivery, Geowiz ELDs
FMCSA takes a look at assault, harassment of female and minority drivers
It's hot out there, what's a trucker to do? Can't idle.
Friday Short Haul - Utah truck rollovers, aging truckers, lifetime CDL bans
Truck-mounted LED billboards coming under fire
Trucker 'drones on' with unique approach to teaching driving skills
Friday Short Haul - Rhode Island tolls, human smuggling, contractor vs employee status
ELD mandate deadline looming, many still not compliant
New "boot" device being deployed to threaten Walmart overnighters
Friday Short Haul - Prime Inc vs Amazon, mother fights HOS changes, truck drivers appreciation week
Proper way to fly the American flag on your truck this Fourth of July
Roundabouts are becoming popular; but are they best for trucks?
Friday Short Haul - Skills test proposal, driver shortage, hemp sentencing, driverless trucks
Experts warn of active wildland fire season
More states signing on to enlist truckers against human trafficking
Friday Short Haul - Shippers of Choice, insurance rates, wheel spikes, WIT award
Freight numbers not holding up to 2018's highs
Truck safety group urges purges of drug abuse drivers
Friday Short Haul - Self-driving certificate, truck platooning, trade war stacking up cargo
HOS waiver coming soon for fireworks haulers
FMCSA takes a further look at detention time
Friday Short Haul - Autonomous delivery, HOS rules changes, CDL retest
Roadcheck 2019 in effect this week
Hemp arrest prompts USDA memo
Friday Short Haul - Waymo big rigs, Move over sting, Under-21 comments
Severe weather prompts renewed emergency declaration
Memorial Day holiday is prime time for cargo thefts
Friday Short Haul - Hauling hemp, road rage fatality, new rules for autonomous vehicles
Autonomous trucks on USPS test run
Future era of cab-less trucks will be the end of HOS rules
Friday Short Haul - FMCSA under-21 comments, Tesla autonomous car crash, 24,000 drivers sign contract with YRC
Under-21 interstate drivers getting serious look by FMCSA
Trucker Buddy program matches drivers with a classroom; everyone wins
Friday Short Haul - Driver awarded $80 million, ODFL driver wins, loading dock black hole
Storm breaks out from Rockies, slams into Midwest, South
Capacity issues have shippers looking at private fleets
Friday Short Haul - HOS rules, dark skies, Falcon drivers
'Bug' permits now required for four eastern states
Simulator use is catching on for schools, carriers
Friday Short Haul - Thinking electric, Penske opens charging station, border crossing crisis, railroads taking trucking business
ELDs might not be the panacea that was hoped for
Truck drivers may soon see "phantoms" driving yard trucks
Friday Short Haul - Nikola big rigs, WIT welcomes Peterbilt, Oregon crashes, Border crossings
Carriers claim financial benefit of putting up drivers in hotels
Uber's IPO application reveals interesting data about its freight brokerage business
Friday Short Haul - CDL examiner arrested, tolls proposed for trucks, marijuana use on the rise
Smart Load Board will get carriers the loads they need
Huge lines and long wait times greet carriers at Mexico border
Friday Short Haul - Marijuana, ATA campaign, personal conveyance rules
Over-the-air downloads revolutionize parameter updates
Don't get scammed by skimmers
Friday Short Haul -- New Cascadias honored, motorist survey, U.S, Xpress awarded, rest stop parking
Legislators address underride collisions, propose more underguards for trucks, trailers
Motorists soon may encounter a different kind of truck convoy
Friday Short Haul -- Women in Trucking, irate motorist, FMCSA eases HOS, Safe-Cap
Recent survey shows cost of roadside repairs is rising
FMCSA announces drug and alcohol clearinghouse website
Friday Short Haul - Swift settlement, driver shortage myth, TCA Best Fleet award
The hidden danger of looking but not seeing
Accident scammers target trucks for financial payout
Friday Short Haul - Snow on the roof, bypassing toll road, Waze under fire
Retailers blame driver shortage for price increases
Drivers' smartphones may be clue to road roughness
Friday Short Haul -- Freight rates, HOS changes, tonnage reports
New tax changes hit drivers hard
FMCSA to implement under-21 interstate driver program for former military
Friday Short Haul -- Connecticut tolls proposed, hydrogen fuel-cell trucks, cell phone use
Congress committee looks at state of America's highways
Number of cargo thefts is down; but dollar value about the same
Friday Short Haul -- Crossing the border, CA sues FMCSA, Lobbying against larger trucks
Detention - A problem still in search of a solution
February Highway Angels honorees named
Friday Short Haul -- C.R. England announces pay raises, eCommerce impact on trucking, TCA announces best fleets
Is a guaranteed minimum pay the solution to the driver shortage?
Long CDL testing wait times cost economy billions of dollars; not helping driver shortage
Friday Short Haul -- Walmart hiring, Uber Freight App, Speed-limiter Law, America's Road Team
Cranking -- The Good, The Bad, and the Ugly
California survives challenge to its low-carbon fuel standards
Friday Short Haul - Highway robbery ... autonomous trucks ... new trailers
LithiumHub enters jump-starter market with Jumpbooster JP30
2019 Looks Good For The Transportation Industry
Raymond Burt named TMC Trainer of the Month for February 2018
TMC Transportation Announces Recipient of Prestigious Wheel Master Award
TMC Transportation Named The Home Depot’s Flatbed Carrier of the Year For Fourth Straight Year
Pay Raises & New Peterbilts for PAM Drivers
New DOT Drug Testing Rules Effective Jan 1, 2018
Amtrak Derailment: Trucks Haul 270,000 Pound Locomotive Engine During Cleanup
Pepsi Places Largest Order Yet For Tesla Electric Trucks
Kavin Hallett named Trainer of the Month for October 2017
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Self Driving Trucks Are Not Coming Anytime Soon
New tax changes hit drivers hard
Last Updated: Tue, April 16, 2019
Anybody want to take a wild guess at what occupation is featured in just about every news story these days about taxpayers getting less refund from their tax return now that we are well into tax preparation season?
If you guessed truck drivers, particularly what are called W-2 drivers, you'd be right on the money … no pun intended.
Company (W-2) drivers
That's because fleet drivers, like a lot of other company workers who have un-reimbursed expenses, and whose income is reported on a W-2, can no longer deduct their daily expenses of meals, cell-phones or other common expenses used in doing their jobs that were deductible until this year's new tax laws went into effect.
That decrease in withholding refunds for drivers because of taking away the deduction, along with that of others similarly affected, has resulted in the average refund being down in early February by 8.7 percent from 2018.
The situation is different, however, for owner-operators, many of whom will enjoy a greater refund, and the carrier companies themselves who, as Class C corporations, benefit from a huge tax break.
FleetOwner asked Equinox Business Solutions to explain how the new tax laws affect the different types of drivers.
Equinox Business Solutions reported that tax liability for company drivers across the board has gone up between $600 and $1,000 this year. This is because drivers are no longer able to deduct on Form 2106 the costs of their phones, meals, gloves and other incidentals; which used to mean an average $15,000 deduction for a long-haul driver who is on the road most of the year.
The new increase in the personal exemption to $12,000 does not cover that loss for many drivers.
Team drivers, like married couples, who file jointly are hit even harder.
"If you have a team, like a husband-wife team, filing jointly, that is causing a real big impact on them, especially for families that have more than two children. Because of the exemptions that are going away, they’re no longer able to claim those exemptions, and that’s causing a big increase in their taxable income as well," said Colton Lawrence, owner and president of Equinox Business Solutions.
“You've got this group of company drivers that, between being impacted on the per diem and then perhaps not being able to take the same level of deductions for the number of children that they have, and they’re getting hammered. We’ve seen taxable income go up by as much as $20,000, $25,000 for large families between that and the per diem."
There is a workaround for company drivers, but it requires the cooperation of the carriers they drive for. The workaround is where the trucking company classifies as per-diem pay a percentage of what they pay their per-mile drivers for the miles that they drive.
Drivers do still get the same pay per mile, but it is split out between taxable income and non-taxable per-diem pay, resulting in an overall lower taxable income for the year.
"A driver's overall pay remains the same but their taxable income goes down, and so in essence, they’re able to take advantage of the per diem deduction just simply by the way the motor carrier is paying them," Lawrence explained.
Some of the larger carriers are already implementing such strategies.
For example, Schneider, one of the top 5 largest trucking companies, has detailed information on its website explaining how its per-diem pay program works.
Their program combines a standard mileage rate with a non-taxable per-diem reimbursement which results in larger weekly paycheck for drivers.
Schneider computes the pay difference for a sample driver who logs 2,250 miles a week, and gets paid $.49 per mile. If that driver is in the per-diem program his or her pay would split to $.30 per mile taxable, and $.17 per mile non-taxable.
The end result at the end of the year between the two pay methods is considerable:
Weekly take-home pay, minus all the taxes and deductions, would be $697.59 for the standard mileage pay. But that would increase to a weekly take-home pay of $809.59 for drivers in the per-diem pay program. That's because less withholding is taken out due to the non-taxable portion.
According to Schneider, that would result in almost $6,000 more annual take-home pay for per-diem company drivers. They claim that 90 percent of their drivers could benefit from this program.
There is a downside to accepting part of their paychecks as non-taxable per-diem pay in lieu of taking it all as standard mileage pay.
Schneider explained that making part of their driver mileage pay non-taxable will have a slight effect on their personal time-off pay – less than $50 per year per week of vacation time.
Also, the non-taxable portion will slightly reduce the social security, unemployment and workers’ compensation benefits that accrue. For example, it would be about $10 per month less social security for every year the driver is in the per-diem program.
And the per-diem portion of a driver's pay is not part of what is matched by the company for 401(k). Schneider says, however, that drivers can fund a higher amount from the extra take-home pay that they receive.
Owner-operators actually might come out ahead because of the tax changes concerning per-diem expenses.
"Beginning Oct. 1, 2018, their per diem increased from $63 a day to $66 a day in the US." It's about five dollars higher for trips to Mexico and Canada. "That change alone, over the course of a full year, will reduce their tax liability by about $200 to $300," Equinox's Lawrence said.
Another benefit for owner-operators in addition to the per-diem increase is that they also get to take an additional 20 percent deduction on top of what they normally compute for their fuel, per diem, maintenance and repairs, etc.
Trucking companies benefit
The big windfall in the new tax plan goes to trucking companies because the corporate tax rate has dropped from 35 percent to 21 percent. There is no run-out time for the change, either. The new rate is permanent.
A word of advice
Besides workers like truck drivers who are seeing smaller refunds because they can no longer deduct un-reimbursed expenses, there is another group of people who are seeing smaller refunds this year. According to an article at Yahoo Finance, this is an easy fix.
Most taxpayers, according to the article, didn't realize that the tax change resulted in their withholding rate being adjusted. There was less withholding taken out to reflect the lower tax rates. However, they still experience a decrease in refund due to other changes in tax law, like reducing or eliminating certain deductions … as truck drivers experienced.
It is recommended that everyone take a look at the W-4 they have registered with their companies and make adjustments if their refund fell short of expectations this year.
Sources: Fleet Owner, Schneider, Yahoo Finance
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