Is there a reason Turbotax is not allowing my travel deductions for temporary assignments away from my tax home as described in publication 463?

[curtis974]

I an independent insurance adjuster. I work temporary assignments as a w-2 employee. Per publication 463 I can deduct my travel expenses. TurboTax is not recognizing this situation.

[ee-ea]

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-credits-deductions/employees-deduct-...

[egpowers]

This answer doesn't resolve or match up with Publication 463, which clearly states that persons subject to USDOT hours of service (truckers, railroad workers and others) are still able to deduct, at up to 80% their meals while travelling, yet TT give no place to claim those expenses.

[CatinaT1]

I understand why this is confusing, but it is correct that these expenses are not deductible for employees unless you meet certain conditions.

If you look at page 28 of the Publication you reference - there is a Caution under Where to Report that says:

Form 2106 is only used by Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses. Due to the suspension of miscellaneous itemized deductions subject to the 2% floor under section 67(a), employees who do not fit into one of the listed categories may not use Form 2106.

Again on page 33, under Completing Form 2106:

Completing Form 2106 

For tax years beginning after 2017, the Form 2106 will be used by Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses. Due to the suspension of miscellaneous itemized deductions subject to the 2% floor under section 67(a), employees who do not fit into one of the listed categories may not use Form 2106. 

IRS Pub 463

[egpowers]

The very next paragraph below what you referenced, contradicts what you referenced. Furthermore, page 34 contradicts page 33 twice.

Also, within Turbo Tax, "Job-Related Expenses", I created the job "Truck Driver", as I go through it, there is a specific line item: "MEAL EXPENSES COVERED BY DEPARTMENT OF TRANSPORTATION RUES" (which mine are), I entered the dollar amount of my meals.

When I click to the next page, it asks me about other unreimbursed expenses related to my job, I entered about $400 worth of items. When I complete that section, it shows me a deduction for that $400 in items, but nothing for the meals. The misc. items technically should not be deductible per my IRS reading.

[ShirlynW]

I am in  agreement with CatinaT1, IRS Pub 463, page 29 does state, "Form 2106 is only used by Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses. Due to the suspension of miscellaneous itemized deductions subject to the 2% floor under section 67(a), employees who do not fit into one of the listed categories may not use Form 2106." 

If you determine you have Temporary Assignments or job, page 4 of IRS Pub 463, Table 1-1 summarizes travel expenses you may be able to deduct. 

Pages 29-33  of Pub 463, has more information on Reimbursements. 

[egpowers]

Having now spoken with four different tax consultants, who specialize in the trucking industry, as well as two tax lawyers. They all advise that the IRS has a problem with this publication, but they also suggest that TT needs to figure out the problem and correct it. They are all curious as to how TT has a specific reference to employees subject to USDOT HOS for meal deductions, but they don't allow it to be claimed, but then on the next page, allow me to claim other misc. deductions, which are approved, but fall into the same category as MISC itemized deduction that should not be allowed. It would seem that there is a either a flaw in TT, TT is picking and choosing what someone can deduct, or TT is not following the IRS correctly either. The recommendation from all 6 was that I claim the entire amount on the first page, and then on the second page claim it at the 80% rate, since TT allows the amounts claimed on the second page to be actual deductions. They also suggested I print out PUB 463, highlight those discrepancies and keep it with my taxes in the event I am audited, since the amount of the deduction will only lower my tax bill by $980.00, I should plan for a possible audit of this amount.

This from page 34:

Hours of service” limits. If you are subject to the Department of Transportation's
“hours of service” limits (as explained earlier under Individuals subject to “hours of service” limits in chapter 2), use 80% instead of 50% for
meals while away from your tax home.

This from page 12:

Individuals subject to “hours of service”
limits. You can deduct a higher percentage of
your meal expenses while traveling away from
your tax home if the meals take place during or
incident to any period subject to the Department
of Transportation's “hours of service” limits. The
percentage is 80%.
Individuals subject to the Department of
Transportation's “hours of service” limits include
the following persons.
• Certain air transportation workers (such as
pilots, crew, dispatchers, mechanics, and
control tower operators) who are under
Federal Aviation Administration regulations.
• Interstate truck operators and bus drivers
who are under Department of Transportation regulations.
• Certain railroad employees (such as engineers, conductors, train crews, dispatchers, and control operations personnel) who
are under Federal Railroad Administration
regulations.
• Certain merchant mariners who are under
Coast Guard regulations.

And again, I will ask TT to please provide documented proof of a self employed railroad engineer operating  a locomotive for a commercial railroad, or a self employed airline pilot operating on behalf of a commercial airline.

This is from Chp 6 on page 28:

Employees. If you are an employee, you must
generally complete Form 2106 to deduct your
travel and transportation expenses.
• You are an employee deducting expenses
attributable to your job.
• You weren’t reimbursed by your employer
for your expenses (amounts included in
box 1 of your Form W-2 aren’t considered
reimbursements).
• If you claim car expenses, you use the
standard mileage rate.

[DianeW777]

The language is confusing for sure, tax law usually is.  The issue is likely because the Tax Cuts and Jobs Act (TCJA) is temporary and currently is 2018-2025.  Once 2026 rolls around, unless Congress makes any changes, everything rolls back to the way it was before. It's up to you if you want to take your chances based on the various guidance you have received. It's not unclear that the TCJA eliminated employee job related expenses, including those for under the Department of Transportation hours of service.

Once the return is completed are you saying the Schedule A itemized deductions actually show these expenses?  The information entry is allowed, however the expenses do not actually carry to the itemized deductions on my test unless one of the employment status that qualify is selected.

@egpowers 

[Margie2]

EG - by son is an interstate truck driver as well. I have been trying to input the meals as you described, however, I have not been successful of yet. Did you enter the amounts by using the forms feature?   

[Cynthiad66]

If your son is a lessee/owner, the Miscellaneous itemized deductions are not allowed, he will be able to file as self employed if he received a form 1099-NEC and not a W-2.  

Some states still allow the Employee  Business Expense deduction.

Alabama, Arkansas, California, Hawaii, Minnesota, New York and Pennsylvania all provide a deduction for unreimbursed employee business expenses on their respective state income tax returns.  So, if you live in one of the above mentioned states you expenses will roll from the federal return to your state but still no Federal deduction.

@Margie2

[egpowers]

The turbo tax helpers are very unhelpful, so here's the situation. Turbo Tax does not give the correct information until you jump a few hoops. If your son's combined expenses and road expenses don't equal greater than the standard deduction, it doesn't matter. However, if all his expenses exceed the standard deduction, here's the process. 

Under deductions, click on Job Related. Under occupation, put in Truck Driver, on the next page click "I wasn't in any of these professions (the last choice)". The check "I'm in the transportation industry".

You'll get to the page "TELL US ABOUT THESE EXPENSES  FOR YOUR TRUCK DRIVER WORK"

Enter the amount of your meals covered by Dept. of Transportation Rules, you'll enter the total amount.

On the next page it should ask you for the total amount of meals not reimbursed and the amount that are reimbursed. The meal information added on this page will populate to the 2106 expenses, which if you are subject to USDOT hours of service regulations, are still deductible, even as a W2 employee. 

You'll then get the page for other road expenses (in may case it's gloves, truck  cleaning supplies, pens, cellphone expenses for work related calls). The next page will ask for reimbursements for those expenses.

My combination of meals and other deductions, added up to $9,000, which put me $500 over the standard deduction.