Travel expenses - van driver tips?

[Benjamin Dover]

Anyone use an accountant who has a theory on this. IRS pub. 463 page 5 describes tips for service on ships and in foreign countries being part of "incidentals" in the standard meal allowance rate, but does not mention tips for domestic travel.

http://www.irs.gov/pub/irs-pdf/p463.pdf


So, if using standard rate for transportation worker, can we deduct domestic tips or not? Thoughts?

Thanks

 

[captfred]

Yes-have done this for years. An enrolled agent that does nothing but pilot tax returns allowed this back when he did my returns. I now do my own returns but continue to claim the van driver tips-have done it for 20 plus years with no problems.

 

[Benjamin Dover]

Yes-have done this for years. An enrolled agent that does nothing but pilot tax returns allowed this back when he did my returns. I now do my own returns but continue to claim the van driver tips-have done it for 20 plus years with no problems.

Thanks Fred

 

[Skybus]

U can deduct anything you want.... until.......

 

[GuinessGuy]

Ditto...I've been deducting Van tips also........

 

[Metro752]

Deductive reasoning?

 

[ualdriver]

Anyone use an accountant who has a theory on this. IRS pub. 463 page 5 describes tips for service on ships and in foreign countries being part of "incidentals" in the standard meal allowance rate, but does not mention tips for domestic travel.

http://www.irs.gov/pub/irs-pdf/p463.pdf


So, if using standard rate for transportation worker, can we deduct domestic tips or not? Thoughts?

Thanks

Are you using the actual cost method or the standard meal allowance method?

 

[Benjamin Dover]

Are you using the actual cost method or the standard meal allowance method?

"Standard rate for transportation worker" meant standard meal allowance method.

 

[ualdriver]

"Standard rate for transportation worker" meant standard meal allowance method.

On page 5 of Pub 463 it says.....

Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. It allows you to use a set amount
for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. The set amount varies depending on
where and when you travel. In this publication, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance. If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel (my notes: company probably does that under their accountable plan). See the recordkeeping rules for travel in chapter 5.

It then goes on to define incidental expenses, which I would think tips to a van driver fall under...

Incidental expenses.
The term “incidental expenses” means:
· Fees and tips given to porters, baggage carriers, bellhops, hotel maids, stewards and others on ships, and hotel servants in foreign countries

So if you're taking a standard meal allowance, which you clearly post in your last reply to me, then that standard meal allowance includes meals and incidentals. Incidentals = tips to van drivers (see definition above). If you deduct tips in addition to the standard meal allowance, you would be deducting your tips twice: once with the standard meal allowance and once again when you deduct the tips.

This is all assuming, of course, that you weren't fully reimbursed by your company in the first place. I assume you're using Form 2106 to deduct the difference between Box 12 Code L on your W2 and your standard meal allowances.

Or I could be wrong

 

[RedDogC130]

is it really worth it?

 

[Benjamin Dover]

On page 5 of Pub 463 it says.....

Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. It allows you to use a set amount
for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. The set amount varies depending on
where and when you travel. In this publication, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance. If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel (my notes: company probably does that under their accountable plan). See the recordkeeping rules for travel in chapter 5.

It then goes on to define incidental expenses, which I would think tips to a van driver fall under...

Incidental expenses.
The term “incidental expenses” means:
· Fees and tips given to porters, baggage carriers, bellhops, hotel maids, stewards and others on ships, and hotel servants in foreign countries

So if you're taking a standard meal allowance, which you clearly post in your last reply to me, then that standard meal allowance includes meals and incidentals. Incidentals = tips to van drivers (see definition above). If you deduct tips in addition to the standard meal allowance, you would be deducting your tips twice: once with the standard meal allowance and once again when you deduct the tips.

This is all assuming, of course, that you weren't fully reimbursed by your company in the first place. I assume you're using Form 2106 to deduct the difference between Box 12 Code L on your W2 and your standard meal allowances.

Or I could be wrong

Thanks for the reply UALDriver. I thought I was pretty clear in my first post that I was using the Standard meal allowance for transportation workers and I also referenced that same page 5 of IRS pub 463 that you quote??

At any rate, you say :

"Incidentals = tips to van drivers (see definition above)."

Does it really say that, or is that your interpretation of that definition? It makes no mention of domestic tips in the definition of "incidentals". It mentions tips on ships and for hotel servants in foreign countries. If the intent was no tips can be deducted at all for business travel if you are using the standard meal allowance, why doesn't it state this?

So, the crux of my question that I was wondering if anyone's CPA, or any CPA's on FI, had a stance on the interpretation of that incidental definition as it relates to domestic tips.

I know it's pretty clear to you UAL, but not to me. Thanks.

 

[FlyinGuy]

Remember you have to get to 2% AGI for your business expenses or it is not deductable.

 

[Secret Squirrel]

Thanks for the reply UALDriver. I thought I was pretty clear in my first post that I was using the Standard meal allowance for transportation workers and I also referenced that same page 5 of IRS pub 463 that you quote??

At any rate, you say :

"Incidentals = tips to van drivers (see definition above)."

Does it really say that, or is that your interpretation of that definition? It makes no mention of domestic tips in the definition of "incidentals". It mentions tips on ships and for hotel servants in foreign countries. If the intent was no tips can be deducted at all for business travel if you are using the standard meal allowance, why doesn't it state this?

So, the crux of my question that I was wondering if anyone's CPA, or any CPA's on FI, had a stance on the interpretation of that incidental definition as it relates to domestic tips.

I know it's pretty clear to you UAL, but not to me. Thanks.

Yes, BUT it breaks out transportation as separate. For me this is a TRANSPORTATION expense.

 

[SteelerMan]

Anyone use an accountant who has a theory on this. IRS pub. 463 page 5 describes tips for service on ships and in foreign countries being part of "incidentals" in the standard meal allowance rate, but does not mention tips for domestic travel.

http://www.irs.gov/pub/irs-pdf/p463.pdf


So, if using standard rate for transportation worker, can we deduct domestic tips or not? Thoughts?

Thanks

Bad Theory, this is pretty clear, no you can not. Because it does not specifically say "domestic hotel van drivers" tips, does not create a loophole that would stand up in an audit. Any tips will be dissallowed when dedcucting via this method. Now just remember who has to pay the fees for the back taxes you owe, its not your tax guy, its you and only you, definately not worth it. But you can deduct whatever you want until an audit Also be aware of the crackdown against cell phone deductions. Tough to justify anymore in an audit. Cheers.

Standard Meal Allowance





Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. The set amount varies depending on where and when you travel. In this publication, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance . If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. See the recordkeeping rules for travel in chapter 5.
Incidental expenses. The term “incidental expenses” means:

• Fees and tips given to porters, baggage carriers, bellhops, hotel maids, stewards or stewardesses and others on ships, and hotel servants in foreign countries,
• Transportation between places of lodging or business and places where meals are taken, if suitable meals can be obtained at the temporary duty site, and
• Mailing costs associated with filing travel vouchers and payment of employer-sponsored charge card billings.

Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, or the costs of telegrams or telephone

 

[Benjamin Dover]

Bad Theory, this is pretty clear, no you can not. Because it does not specifically say "domestic hotel van drivers" tips, does not create a loophole that would stand up in an audit. Any tips will be dissallowed when dedcucting via this method. Now just remember who has to pay the fees for the back taxes you owe, its not your tax guy, its you and only you, definately not worth it. But you can deduct whatever you want until an audit Also be aware of the crackdown against cell phone deductions. Tough to justify anymore in an audit. Cheers.

Standard Meal Allowance





Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. The set amount varies depending on where and when you travel. In this publication, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance . If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. See the recordkeeping rules for travel in chapter 5.

Incidental expenses. The term “incidental expenses” means:

• Fees and tips given to porters, baggage carriers, bellhops, hotel maids, stewards or stewardesses and others on ships, and hotel servants in foreign countries,
• Transportation between places of lodging or business and places where meals are taken, if suitable meals can be obtained at the temporary duty site, and
• Mailing costs associated with filing travel vouchers and payment of employer-sponsored charge card billings.

Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, or the costs of telegrams or telephone

So how is this so clear? If "no tips at all" was the intent of the incidental definition, why does that first bullet just address ship/foreign travel? I would think that first bullet would read something like "all fees and tips incurred during travel away from home for business purposes" would cover all business travel if using the standard allowance if that was the IRS intent like you guys say. Why is the ship, foreign country statement there? I don't know, and I say you don't know either.

That's why I would like to know if someone besides a pilot-expert has a take on this, like a CPA. Right now this is like a Navy-Air Force argument about what is authorized - "does the book say we can do it, or does it say we can't do it?"

Again, glad it's clear for you guys, not so clear to me. But I am USN