In December 2017, the newly-revised GOP tax bill was passed by the Senate. This bill greatly affects many Americans, including truckers, but how?
The Good, The Bad, and The Ugly
With the new bill, huge decreases in taxes will be seen by corporations. The goal is to bring business back to America and to reinvest in American workers. The US corporate tax rate used to be 35%. It is now 21%. The estate tax exemption was also doubled to $11.2 million per individual. Additionally, this tax bill stops the penalties for those who elect not to get health insurance beginning in 2019.
A lot of truckers are worried about how the tax reform bill is going to affect them. In some ways, there are benefits. For example, the standard deduction is going to practically double for single taxpayers. It will go from $6350 to $12,000 per individual. Married couples who file their taxes jointly will receive a standard deduction of $24,000. It used to be $12,700 per couple.
For some truck workers, this could be a good thing as taxes may be generally reduced by the higher standard deductions, and they may end up simply paying less in taxes because they’ll be in a lower tax bracket. They might even get a raise from their employers. It would seem this way because big companies are getting tax cuts from the government, so why wouldn’t they pass it onto their workers? We’ll see if this happens.
Biggest Effects: Itemized Deductions & Per Diems
One of the biggest changes that drivers will see occurs with the changes in itemized deductions, which were removed with the new bill.
Interstate truck drivers get a per diem. This compensates drivers for meals they need while on the road. However, with the new plan, the per diem write-off is going to be taken away because it’s an itemized deduction.
There are indeed good parts of this new tax bill. Truck drivers like other Americans hope that this will stimulate the American economy. However, truck drivers may be hurt by the changes to itemized deductions.
The bottom line is that this tax reform bill will likely affect your job, salary, taxes, and finances overall. All truckers will have a different experience with it, though, so it’s important to go over your individual finances, speak with your employer, and possibly with an accountant to see how these changes will directly affect you.