13 Truck Driver Tax Deductions You Need to Know
Truck drivers are a crucial part of nearly every industry in the world, and truckers themselves work hard to ensure the job gets done on time. Take advantage of available tax deductions for truck drivers to simplify your return and save as much of your taxable income as possible. In this guide, we’ll go over some of the top deductions for truckers to be aware of.
- Truck drivers can take advantage of many tax deductions to reduce their tax bill.
- Long-distance truck drivers can claim different deductions than local truckers.
- Truck driver tax deductions are somewhat unique, and require careful tracking throughout the year.
- Certain expenses, such as commuting costs, aren’t tax-deductible.
- Accounting software can help truck drivers manage expense tracking and save more money on their taxes.
Table of Contents
- Who Is Eligible to Claim Tax Deductions for Truck Drivers?
- 13 Tax Deductions for Truck Drivers
- Tips for Efficiently Filing Taxes and Tracking Deductions
- Non-Deductible Truck Driver Expenses
- Use FreshBooks To Simplify Your Tax Preparation
- Frequently Asked Questions
Who Is Eligible to Claim Tax Deductions for Truck Drivers?
As of 2020, truck drivers who are classified as independent contractors or owner-operators (that is, not employees) are eligible to claim business deductions on their taxes. Additionally, your vehicle must be used for business purposes if you plan to deduct any car-related expenses. You’ll need to track your tax-deductible business expenses throughout the year in order to claim them, which is done on Schedule C (Form 1040).
13 Tax Deductions for Truck Drivers
Understanding tax deductions is essential for your tax strategy throughout the year. Here are the top 13 deductions for people in the trucking business to be aware of.
1. Meals and Lodging Deductions
Long-distance truck drivers (not local drivers), can deduct the cost of food and accommodations incurred while on the road from their annual income tax return. The criteria is that you are required to be away from your ‘tax home’ (either your home address or business headquarters) for long enough to require food and rest—typically overnight. You have the choice to itemize deductions and claim up to 80% of expenses paid, or you can opt to take the per diem rate for travel and meal expenses. This rate varies depending on where and when you’re traveling for work. The per diem rate does not include lodging costs.
2. Insurance Plan Deductions
Many truck drivers invest heavily in different kinds of insurance. This obviously includes commercial auto liability insurance and property damage insurance, but you may also purchase cargo insurance covering goods lost in transit or in the event of business interruption. These premiums can add up, but the good news is they’re fully deductible.
3. Cell Phone Plans
Cell phones are one of a trucker’s many job-related expenses. If you have a cell phone line that is dedicated to your work, you can deduct 100% of the cost of the plan from your business tax return. The same goes for the cost of the phone itself, along with tablets or laptops that are for business purposes.
4. Vehicle Expense Deductions
If you drive a semi-truck as a professional independent contractor, the IRS considers it a qualified non-personal-use vehicle. This means that all the expenses that come with owning and operating the vehicle can be claimed as a tax deduction. This includes depreciation, insurance, loan interest for financed vehicles, registration, tires, parking fees, tolls, cleaning, and more.
5. Fuel and Travel Expenses
Save your gas station receipts! Fuel is a constant and often significant expense for self-employed truck drivers, so it’s good to know that it is considered a deductible business expense. As with other travel expenses, you can only claim this deduction if you itemize all your deductions. Alternatively, you can take the per diem rate and simplify the process.
6. Truck Repairs/Maintenance
In addition to other vehicle expenses, repairs and maintenance to your qualified non-personal-use truck are 100% deductible from your yearly tax return. Save your receipts every time you have the truck serviced or repaired by a mechanic.
7. Medical Expense Deductions
It’s not uncommon for truck drivers to be required to get medical exams as a condition to work. If you pay out-of-pocket (not through your health insurance coverage) for these exams, the expense is considered a 100% deductible business expense.
8. Office Expense Deductions
Whether your business is headquartered in a home office or a separate space, it’s a good idea to track and deduct the everyday office expenses you incur. This includes stationery, pens, paperclips, printers, laptops, photocopiers, and anything else the IRS considers ‘usual and necessary’ for your industry.
9. Licensing Fees
Any license fees (and other taxes) you incur as you run your trucking business can be deducted from your taxes. This includes the Heavy Highway Vehicle Use Tax and the fees associated with maintaining your commercial driver’s license (CDL).
10. Personal Products Deductions
Trucking is somewhat unique when it comes to deducting certain items from your federal tax return. Small, necessary purchases for working on the road (called sleeper berth expenses) might include a small refrigerator, kettle, GPS, bedding, cleaning supplies, and gloves, among others. These are deductible business expenses, along with the costs of doing laundry and showering while working on a route.
11. Association Dues
Did you know that you can deduct the dues you pay to your trucking association and/or union? The only stipulation for claiming these fees as deductions is that they’re required for your business and help you advance your career.
12. Education Expense Deductions
If you spend money on training (trucking school) to get or maintain your commercial driver’s license, or for certification in more advanced courses, be sure to save all receipts. The costs of educational courses necessary for your business can be completely deducted from your tax bill.
13. Tools and Equipment
Truck drivers depend on a number of tools and pieces of equipment to do their job and stay safe on the road. These expenses are deductible if they’re needed for your business, and might include chains, tarps, straps, tire irons, tape, and anything else of that nature.
Tracking tax deductions can make a big difference to your bottom line. And with a tax preparation tool like FreshBooks, you can make the process quick, simple, and painless.
Tips for Efficiently Filing Taxes and Tracking Deductions
As a truck driver, you know how important it is to stay organized. You keep meticulous records of your cargo and your routes, so be sure to apply the same philosophy to your expense tracking and strategy for income taxes.
The best way to take advantage of these deductions and reduce your tax liability is through careful, accurate record-keeping and detailed documentation. You can do this manually with a spreadsheet, or you can save time with an integrated accounting software option. Either method will help you calculate your expenses and determine the best strategy to reduce your taxes owed, whether it’s itemizing your deductions or taking the IRS standard per diem rate.
Non-Deductible Truck Driver Expenses
Although truck drivers have the opportunity to claim a number of deductions, not everything is eligible to be claimed as a tax write-off. There are a few common trucker expenses that you won’t be able to claim on your return during the tax season.
Non-deductible truck driver expenses include:
- The costs of commuting between your home and business headquarters
- Clothing that’s suitable and appropriate for everyday wear
- Your bill for your home phone line
- Any travel or meal expenses incurred during personal trips
- Any expenses you incurred that were later reimbursed by a client, employer, or insurance plan
Use FreshBooks To Simplify Your Tax Preparation
Tax deductions are a crucial part of running a successful truck-driving business. If you’re looking for a faster, simpler way to track your deductible business expenses, organize tax documents throughout the year, and save more money on your final tax bill, consider a tool like FreshBooks accounting software.
FreshBooks makes it easy to handle even the more complex tax deductions that truck drivers can claim, helping busy business owners save more time and money in the process. Try FreshBooks free today.
Looking for more info on tax write-offs for professionals? Take a look at the FreshBooks guide on small business tax deductions.
FAQs About Truck Driver Tax Deductions
Do you have more questions on the available tax write-offs for truck drivers? Here are answers to some of the most frequently asked questions to help you out.
Can semi-truck drivers deduct mileage?
No, semi-truck drivers can’t deduct mileage as you would for other kinds of professional vehicles. However, you can deduct all actual expenses you incur for the vehicle if you itemize your expenses, including fuel, maintenance, repairs, depreciation, insurance, and more. Alternatively, you can choose to claim the per diem rate which changes depending on where and when you travel.
Can you write off a truck as a 1099?
Yes, if you are a self-employed 1099 contractor truck driver (owner-operator), and your qualified non-personal-use semi-truck is in your business name and used for work, it’s fully deductible. This includes vehicle expenses, maintenance, and even interest on your lease if the truck is financed.
Can I claim gas on your taxes for driving to work?
No, the costs for fuel that you incur on your commute between your home and workplace are not tax-deductible. However, fuel costs that truckers incur while driving their business vehicle for work purposes are tax-deductible.
How do truck drivers pay less taxes?
The best way to pay less taxes as a truck driver is to carefully track your expenses throughout the year, and then take the time to calculate those itemized expenses. This allows you to determine exactly how much you spent on business expenses, which will help you decide whether to claim itemized truck driver tax deductions or take the per diem deduction rate.
Can you write off 100% of a truck?
Yes, since semi-trucks are considered qualified non-personal-use vehicles, the actual costs incurred in using them for business are 100% deductible. This includes interest on your vehicle’s financing and any other expenses incurred to keep it operational.
About the author
Sandra Habiger is a Certified Public Accountant with a Bachelor’s Degree in Business Administration from the University of Washington. Sandra’s areas of focus include advising real estate agents, brokers, and investors. She supports small businesses in growing to their first six figures and beyond. Learn more about her work at http://www.sixfiguresaccounting.com/ .