Tax Deductions Tips for Owner-Operators – 2026 Update

Managing your taxes is one of the biggest challenges of operating an owner-operator trucking business. Running your own operation means every dollar counts, especially with trucking margins expected to stay tight into 2026. Owner-operator tax deductions help lower your taxable income and keep more money in your pocket when you file your 2025 return.

Knowing which expenses qualify and how to document them throughout the year gives you more control over your final tax bill. Good planning and consistent recordkeeping help you avoid surprises and take advantage of the deductions available to self-employed owner-operators.

This guide explains the most common truck driver tax deductions, what to track, and what the IRS expects when it is time to file.

Note: This guide is for general purposes only. Always refer to IRS regulations and consult a tax professional for official guidance

What are tax deductions in freight? 

Tax deductions reduce the portion of your income the IRS can tax. Owner-operators claim these deductions by documenting ordinary and necessary business expenses throughout the year. These expenses can include costs like fuel, insurance, maintenance, equipment, and meals while on the road. When tracked properly, deductions help lower what you owe when filing your 2025 return.

Types of taxes owner-operators pay

Owner-operators handle two types of taxes throughout the year, and understanding each one helps you plan and avoid surprises at filing time.

Self-employment taxes

Owner-operators are responsible for paying Social Security and Medicare taxes directly to the IRS. These are normally withheld for company drivers, but self-employed operators pay both portions themselves. The combined self-employment tax rate is 15.3 percent, which includes 12.4 percent for Social Security and 2.9 percent for Medicare.

Federal and state taxes

Owner-operators must estimate and pay federal income tax and, if required, state income tax. If you expect to owe $1,000 or more after withholding and credits, the IRS requires quarterly estimated payments. Depending on where you live, you may also be responsible for county or local taxes, so review the rules in your home state.

7 owner-operator tax deductions you can claim

Business expenses are deductible when they are ordinary and necessary, meaning they are common in the trucking industry and needed to run your operation. Here are the expenses most owner-operators claim when filing their 2025 return in 2026.

1. Insurance deductions

Insurance is one of the most common deductions. Premiums for cargo, liability, physical damage, and health insurance can all be deducted.

Example: If you pay $1,200 annually for liability insurance, you can deduct that amount from your gross income when filing taxes, which lowers your tax liability.

2. Communication and phone expenses

Phone and data plans used for business qualify as deductions. If you use the phone for both personal and business needs, calculate the percentage used for work.

Example: A $60 monthly plan used 70 percent for business becomes a $504 annual deduction

Business-related apps and software also qualify. You can also deduct apps or software you subscribe like load boards, TMS, and more

3. Fuel, maintenance and repairs

Fuel and maintenance are major operating costs. You can deduct fuel purchases, oil changes, tire replacements, and routine service as long as you keep receipts or digital records

Example: A driver who spends $15,000 on fuel and $2,500 on maintenance can deduct both amounts. Using a dedicated fuel card can simplify tracking these types of expenses.

4. Equipment and Section 179 Rules

Under Section 179 of the Internal Revenue Code, you can deduct the total cost of qualifying equipment — including trucks — in the year it is purchased if it meets specific criteria. You can also deduct any tools or equipment you use for your business, such as GPS devices, as long as they meet the necessary criteria.

Example: A $100,000 truck may be fully deductible in its first year.

5. Training & CDL education

Investing in your education and training is beneficial for your career and tax-deductible. You can claim costs for truck driver school, safety courses, and training to maintain your commercial driver’s license

Example: Attending a $500 safety course can be deducted, as it directly relates to your business operations.

6. IRS per diem rates for 2025 – 2026

You can also claim per diem expenses for meals when you’re on the road. The IRS allows you to deduct 80% of your per diem rate, which for 2025 is $80 per day.

Example: If you’re away from home for 10 days, you could claim $640 for meals ($80 x 0.80 x 10)

Keeping all receipts and travel documentation for at least three years is good practice, even if you stick to the per diem allowance.

7. Additional owner-operator expenses you can deduct

You can also deduct any interest you pay on business loans throughout the year and depreciable property. If you have a home office, you might qualify for a deduction. This lets you write off a portion of your home expenses — such as utilities, rent, and internet — based on the size of your dedicated workspace and the percentage of your square footage used for business purposes.

Other owner-operator tax write-offs include the following:

• Retirement plan contributions
• Startup costs
• Supplies
• Permits and license fees
• DOT physical exam costs
• Travel
• Truck lease
• Accounting services
• Truck repairs and accessories

If you don’t file a tax return or show any owner-operator tax deductions, the IRS will determine the amount of taxes you own without considering any tax deductions. The IRS estimate is typically higher than what you would owe if deductions are applied.

SEE ALSO: What Is Hot Shot Trucking?

Common tax myths

There are several persistent myths about owner-operator taxes. Here is what you need to know when filing your 2025 return.

Myth: You will owe no tax the year you start your business
Reality: You can still owe taxes in your first year, especially if you lease your truck or earn steady income. Starting a business does not automatically eliminate your tax liability.

Myth: You can deduct deadhead miles and days you miss work due to illness
Reality: The miles themselves are not deductible. You can only deduct the business expenses tied to that travel, such as fuel or tolls.

Myth: You can deduct the full cost of your dog
Reality: A dog may qualify as a security measure, but only if it is used for protection and you can document related costs like food or veterinary care.

Myth: You must incorporate your business
Reality: Incorporation is not required. It only makes sense when the tax benefits outweigh the added cost and paperwork.

Myth: You can negotiate back taxes for pennies on the dollar
Reality: Offers in Compromise or tax relief are granted only in very specific situations. Most owner-operators do not qualify.

How to document your deductible business expenses

To claim owner-operator tax deductions, you need to keep good records. Without documentation, you could be at risk for an audit.

Follow these tips, and you’ll have what you need to claim deductions as an owner-operator:

1. Create digital copies: Take photos of receipts as you collect them and store the images in a dedicated folder. Keep the physical receipts as a backup in case the IRS asks for verification.
2. Collect receipts for credit card charges: Save receipts for any business expense charged to a credit card. This includes lumper fees, tolls, weigh station fees, and any technology required to run your business. Many owner-operators keep one card for business and one for personal use to simplify tracking.
3. Keep all records starting with electronic logging devices (ELDs): Your electronic logging device or ELD helps support deductions like per diem. Save your ELD logs and any related documentation to verify the days you were away from home.
4. Leverage technology: Fuel card apps, accounting software, and business management platforms can store receipts and track spending automatically. These tools make it easier to retrieve the records you need when filing your 2025 return.

How to claim per diem business expenses

Owner-operators can claim per diem for meals and incidental expenses while away from home for work. For the 2025 tax year, the full-day rate remains $80, and 80 percent of that amount is deductible on Schedule C when you file in 2026.

Per diem reduces taxable income rather than your final tax bill. Keep travel records for at least three years to support the days you were away from home.

How to claim depreciation

Depreciation lets you recover the cost of equipment used in your business over time. To claim depreciation on your 2025 tax return, you must list each piece of qualifying equipment, its cost, the date it was placed in service, and the depreciation method you are using.

Section 179 allows you to expense the full cost of qualifying property, including trucks, in the year you place it in service. If you do not elect Section 179, you will generally depreciate the truck over several years using IRS schedules. Most owner-operators use straight-line depreciation, though accelerated methods may also be available.

You claim depreciation on Form 4562 and include it with your 2025 return when filing in 2026. Keep purchase records, loan documents, and service dates so you can support the amount you claim. For specific guidance on the correct method and timeline, refer to IRS Publication 946: How to Depreciate Property.

How to minimize your taxes

Here are some tips to reduce your taxes:

• Consult a professional: Get help from a tax professional or business services provider specializing in owner-operator taxes. These services typically save you more money in deductions and other tax loopholes than you pay for their expertise, so it’s a good investment.
• Save tax-free money: Save money tax-free by regularly contributing to an individual retirement account, simplified employee pension plan, or 401(k). A portion of your contributions are tax-exempt until you start drawing on them.
• Track personal vehicle miles: Commuting to and from work isn’t an allowable business expense. However, you can deduct the mileage if you drive for work-related errands, such as going to the bank, meetings, or trucking events.
• Look for tax credit opportunities: You can receive tax credits for paying tuition — for yourself or your children — at qualified educational institutions.

If you need more detailed tax guidance, you can also refer to the Trucking Tax Center at the IRS.

What to know about IRS audits

Large or unusual deductions for a single-truck operation can draw attention from the IRS. The agency generally has up to three years to audit a return, so keep your records for at least that long in case they are needed.

An audit notice does not mean your preparer made a mistake. The IRS selects some returns at random and often focuses on verifying expenses. If you receive a notice, contact the person who prepared your return and provide the documentation you have kept throughout the year.

Maximize deductions, minimize tax stress

Taxes do not have to feel overwhelming. Keeping good records, tracking expenses throughout the year, and understanding which truck driver deductions apply to your business can make filing your 2025 return much easier. Working with a tax professional early in the year also helps ensure you receive every deduction available to you.

Staying financially organized starts with steady, reliable work. The Truckstop Load Board helps owner-operators find quality freight, plan profitable routes, and keep their business moving throughout the year. To learn more and start finding loads, visit the Truckstop Load Board.

Start earning today.

SEE ALSO: How to Become a Freight Broker in Georgia (Complete Guide)