Discussion:First Truck driver return- 2 questions

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Discussion Forum Index --> Tax Questions --> First Truck driver return- 2 questions


Beengel (talk|edits) said:

February 21, 2007
Working on a client return, client based in MN. Two question:

1. On W-2 there is a wide variance on the federal and state wages. Is there a valid reason for this? Client claims to be resident of the state. Is this normal?

2. For meal allowance (he travels all over the country) will use $52 per day, with 75% the day he leaves and the day he returns. How are day trip days counted when he leaves the area but gets back at night,and what if any amount gets used for meals--is it half?

Thanks!

Blrgcpa (talk|edits) said:

21 February 2007
The state wages amy be for driving in that state only. Were there extra w-2s for other states?

Beengel (talk|edits) said:

February 21, 2007
No, there were not. Clearly he drove in other states, so is he suppose to get other W-2's (he says not).

Do I make an adjustment on the state return to just reflect wages taxed in the state?

Death&Taxes (talk|edits) said:

21 February 2007
The Federal wages might include some travel reimbursement that was not on an accountable plan....but this depends on how MN handles this. I have seen such in PA.

Beengel (talk|edits) said:

February 21, 2007
No, I checked with him and he said not. Direct reimbursements are made for accountable items. The state is listed as about 16% only of total federal wages, and most of the time (90%) he is out of state.

Death&Taxes (talk|edits) said:

21 February 2007
Obviously the payroll department must think he resides in another state.....this is the only thing that makes sense.

Deback (talk|edits) said:

February 21, 2007
I would include his total taxable wages on the state return in which he lives (and do nothing with the other states in which he drove through).

Beengel (talk|edits) said:

February 21, 2007
Even if the W-2 lists such a little amount? (and of course very little was withheld for our high tax state...)

Would I then enter the box 16 State as the Federal when they do not match?

KatieJ (talk|edits) said:

21 February 2007
Federal law prevents states from taxing the earnings of interstate motor carrier employees on a source basis. Only the state of the employee's residence can tax the earnings. 49 USC Sec. 14503(a). http://caselaw.lp.findlaw.com/casecode/uscodes/49/subtitles/iv/parts/b/chapters/145/sections/section_14503.html

Minnesota taxes all income of residents, regardless of source ([ Minn. Stat. ยง 290.014, Subdivision 1 .]). If he is a Minnesota resident, Minnesota taxes ALL of his income. If he is a nonresident of Minnesota (even though the employer's headquarters is located there), Minnesota can't tax ANY of his income. Either way, the W-2 is wrong.

Beengel (talk|edits) said:

February 21, 2007
I had a hunch that might be the case. Thanks Katie!

Deback (talk|edits) said:

February 21, 2007
Beengel - Enter the W-2 as it is on the W-2 worksheet in the program, but the person's state return will include the total taxable wages. The program should automatically transfer his total income to his state return.

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