OTTAWA — While the trucking industry managed to convince the Canada Revenue Agency (CRA) just before tax time last year that trucker’s meals shouldn’t be subject to a 50 percent clawback, some confusion remains about who is eligible to use the simplified method in making their meal claims.

Last year, the Canadian Trucking Alliance, OBAC, and the Teamsters, with support from this magazine, launched the Lunch-bag Let-down Campaign, which inspired the mailing of nearly 5,000 postcards to Finance Minsiter Jim Flaherty, urging him to increase the allowable proportion of meal costs drivers can expense on their personal or small business tax forms.

Ottawa then agreed to incrementally restore the allowable proportion of meal costs drivers can expense to 80 percent from the 50 between 2007 and 2010.

So with one tax term behind us, and this year’s tax deadline approaching, it’s important to note that some owner-ops around the country reported their TL2 claims for 2006 were being disallowed by CRA, while others seemed to be getting away with it. The distinction remains — as it has always been, technically — that the TL2 simplified method is available only to employees, not self-employed individuals.

Sole proprietor owner ops are expected to calculate
meal deductions using the detailed method.

The simplified method is available for company drivers and incorporated owner-ops (themselves employees of their own corporation). The logbook is used to verify the number of days a meal deduction can be claimed, with a total cost of $51 per day ($17 per meal).

Sole proprietor owner-ops are expected to calculate meal deductions using the detailed method — keeping receipts. When using the detailed method the driver is required to keep a record book noting: the date of the expense, the time the trip started and ended, the location (name of city or town), the name of the restaurant or hotel, the type of expense (lunch, dinner, lodging…), and the amount paid. Receipts to back up the record book claims are also required.

For years sole proprietor owner-ops were filing meal claim deductions using the simplified method, but recently CRA has begun auditing those claims.

The simplified method was introduced with the intention of providing company drivers with a less taxing alternative for calculating deductions.

The rationale behind the move was that regular employees are not used to doing the additional paperwork and keeping all their receipts, while self-employed people are already in the practice of keeping receipts for all their purchases. Incorporated owner-ops can use the simplified method because by being incorporated they become company drivers again.

— (Be sure to check out this week’s online feature, Digesting Numbers, for more tax-saving info for owner-ops).