Tax Deductions Freight Brokers Should Know to Maximize Their Return

Running a freight brokerage means managing constant pressure on margins. Rates shift, costs add up, and cash flow can get tight quickly. When the market feels unpredictable, it becomes even more important to pay attention to the basics that protect the money you already earn.

Tax deductions are part of that foundation.

They do not create new revenue or fix pricing challenges. What they can do is help ensure the legitimate costs of operating a brokerage are properly accounted for, so you are not paying more in taxes than necessary.

This tax guide outlines the tax deductions freight brokers should understand, along with common expenses that should not be deducted. The goal is clarity and consistency, not aggressive write-offs. Use this as a reference point for better record-keeping and more productive conversations with your tax professional.

1. Office and operational expenses

Office and operational costs are some of the most straightforward deductions for freight brokerages, but they are also where small mistakes can creep in if expenses are not tracked consistently.

Common deductible office expenses include:

• Office rent or coworking space fees
• Utilities such as electricity, water, and internet
• Office supplies like paper, printers, toner, and postage
• Furniture and equipment including desks, chairs, monitors, and headsets

For brokerages operating out of a dedicated office, these deductions are usually clear-cut. The key is keeping invoices and receipts organized throughout the year rather than scrambling at tax time.

Home office considerations

Some freight brokers operate fully or partially from home. In those cases, a home office deduction may apply, but only if the space meets IRS requirements.

To qualify, the space must be:

• Used regularly and exclusively for business
• Clearly defined as a work area
• Not used for personal activities

Eligible home office expenses may include a portion of rent or mortgage interest, utilities, internet, property taxes, and homeowners insurance. The deductible amount is typically based on the percentage of the home used for business.

Important note: Claiming a home office deduction without meeting the exclusive-use requirement is a common mistake and can create unnecessary risk. Taking a late-night call to book a hot load from your couch or kitchen table does not count. When in doubt, it is better to be conservative.

Equipment and larger purchases

Larger purchases such as computers, printers, or office furniture may need to be depreciated over time rather than deducted all at once, depending on cost and tax treatment.

Keeping these purchases categorized separately from everyday supplies makes it easier to:

• Apply the correct tax treatment
• Track asset value over time
• Avoid misclassification during tax prep

2. Technology and software costs

For most brokerages, freight technology is no longer a nice-to-have. It is a core operating expense. Between managing loads, carrier vetting, invoicing customers, and monitoring risk, brokers often rely on a stack of digital tools to keep the business moving.

The good news is that many of these technology costs are fully deductible as ordinary and necessary business expenses.

Common deductible technology and software expenses include:

• Transportation Management Systems (TMS)
• Load board and freight marketplaces
• Accounting and bookkeeping software
• CRM and sales tools
• Fraud prevention, identity verification, and carrier vetting tools
• Cybersecurity software and data protection services
• Cloud storage, e-signature, and document management platforms

Because most of these tools are subscription-based, it is easy for costs to blend into operating expenses and go unnoticed. Reviewing annual software spend can help ensure these deductions are fully captured.

One-time vs ongoing software costs

Monthly and annual subscriptions are typically deductible in the year they are paid. Larger one-time purchases, such as custom software development or long-term licenses, may need to be capitalized and amortized over time.

Separating recurring subscriptions from larger technology investments makes tax treatment clearer and reduces cleanup work during tax prep.

Don’t forget the supporting costs

Technology deductions are not limited to the core platforms themselves. Related expenses like implementation fees, integrations, onboarding, and user training are often deductible as well.

These supporting costs add up quickly and are easy to miss if they are buried in setup invoices or bundled contracts.

3. Marketing and business development

Marketing and business development are essential for growing and maintaining a healthy freight brokerage — and the good news is that many of those costs are deductible as ordinary and necessary business expenses.

Marketing and advertising expenses that may be deductible include:

• Paid advertising (digital ads, trade publications, billboards, etc.)
• Website design, hosting, and maintenance
• SEO and content marketing
• Promotional materials (brochures, business cards, swag)
• Trade shows, conferences, and sponsorships
• Client entertainment tied directly to business development (subject to IRS rules)

Under IRS rules, costs that are ordinary and necessary to promote your business are typically deductible in the year they are paid or incurred. These are expenses that help your company attract customers and build brand awareness, which is exactly the purpose of most marketing efforts.

Important note: If you give business gifts (like a client holiday gift or branded merchandise given directly to one person), the IRS limits that deduction to $25 per recipient per year.

4. Payroll, contractors, and people costs

People are one of the largest and most consistent expenses for freight brokerages. From sales and account management to back-office and operations roles, payroll-related costs make up a significant portion of day-to-day spend.

Many of these expenses are deductible when they are directly tied to running the business and properly documented.

Common deductible payroll and people-related expenses include:

• Employee wages and salaries
• Employer-paid payroll taxes
• Health, dental, and vision insurance contributions
• Retirement plan contributions
• Bonuses, commissions, and incentive pay
• Recruiting and hiring costs
• Onboarding and training expenses
• Education and certifications related to the role

Contractors vs carriers

Payments to independent contractors such as sales support, marketing, IT, or administrative services are generally deductible and may require a 1099-NEC when reporting thresholds are met.

Payments to motor carriers for freight transportation, however, are typically treated differently. In most cases, brokers do not issue 1099 forms to carriers for standard freight charges because carriers are operating as separate transportation businesses, not as contractors performing services for the brokerage.

Where brokers can run into trouble is when payments fall outside standard freight movement, such as consulting or non-transport services. Those payments may be subject to 1099 reporting depending on how the service is structured.

Clear contracts, invoices, and payment records go a long way toward keeping this distinction clean and defensible.

Training and professional development

Training expenses tied to maintaining or improving job-related skills are usually deductible. Examples include:

• Industry webinars and workshops
• Software training and certifications
• Continuing education related to logistics, compliance, or finance

Training that prepares someone for an entirely new profession generally does not qualify, which is where context and documentation matter.

5. Financial services and cash flow expenses

Cash flow management is a constant focus for freight brokerages. Between paying carriers, waiting on shipper payments, and covering day-to-day operating costs, many brokers rely on financial tools to keep operations moving.

The costs associated with those tools are often deductible, but they are easy to miss because they are spread across bank statements, platforms, and providers rather than appearing as a single line item.

Common deductible financial service expenses include:

• Factoring fees
• Line of credit fees and interest
• Bank fees, including ACH, wire, and account maintenance fees
• Credit card processing fees
• Interest on business loans
• Credit checks and shipper risk monitoring tools

Factoring and financing costs

Factoring fees and financing charges are generally treated as business expenses. Because these fees are often deducted automatically, they can be overlooked if you focus only on net deposits.

Tracking gross invoice amounts alongside fees paid helps ensure financing costs are fully captured at tax time.

For brokers using Denim by Truckstop, the financial reporting dashboard shows how much has been paid in factoring fees over a specific time period, making it easier to review these costs throughout the year.

These expenses should also be reflected clearly on your profit and loss (P&L) statement, which helps confirm they are categorized correctly and support smoother conversations with your accountant.

Bank and transaction fees

Transaction fees can add up over the course of a year, especially for brokerages processing a high volume of payments. Wire fees, ACH fees, overdraft fees, and merchant processing fees are typically deductible when tied directly to business activity.

6. Professional services and compliance

Freight brokerages operate in a regulated environment, which makes professional support and compliance-related services a necessary cost of doing business. These expenses are often fully deductible when they are tied directly to operating, protecting, or maintaining the business.

Common deductible professional and compliance expenses include:

• Accounting and bookkeeping services
• Tax preparation and advisory services
• Legal fees for contracts, disputes, or compliance guidance
• Business and operational consulting
• FMCSA filings and registration services
• Surety bond premiums
• Licensing and renewal fees

These costs tend to show up at predictable times during the year, but they are easy to overlook if they are paid annually or bundled into service agreements.

Accounting, tax, and advisory services

Fees paid to accountants, bookkeepers, and tax professionals are generally deductible when the services relate to business operations. This includes help with:

• Monthly or quarterly bookkeeping
• Tax preparation and filing
• Financial reviews and planning
• Support during audits or notices

Keeping these expenses clearly labeled helps distinguish them from personal tax preparation, which is not deductible as a business expense.

Legal and compliance costs

Legal fees related to drafting or reviewing contracts, addressing disputes, or navigating regulatory requirements are typically deductible. The same applies to compliance-related services, including:

• FMCSA registration and updates
• Surety bond costs
• Third-party compliance support

Surety bond premiums are typically treated as compliance-related expenses rather than insurance, since they are required for broker licensing and do not transfer risk in the same way as traditional insurance policies.

Consulting and specialized support

Some brokerages bring in outside consultants to support technology decisions, process improvements, or operational changes. When those services relate directly to the business, the associated costs are usually deductible.

As with other categories, clear agreements and invoices make classification easier and reduce questions during tax prep.

7. Insurance and risk protection

Insurance is one of those costs freight brokerages hope they never need, but cannot operate without. From liability exposure to fraud-related losses, these policies help protect the business from events that could otherwise disrupt operations or cash flow.

In most cases, insurance premiums paid for business coverage are deductible as ordinary business expenses.

Common deductible insurance expenses include:

• General liability insurance
• Errors and omissions (E&O) insurance
• Fraud and crime insurance
• Workers’ compensation insurance
• Employment practices liability insurance
• Business property or office insurance

Fraud and crime coverage

As fraud schemes targeting brokers have become more common, many brokerages carry insurance that covers losses related to fraud, impersonation, or theft. Premiums for fraud or crime coverage are typically deductible when the policy protects the business from financial loss tied to operations.

This type of coverage is often grouped with broader risk protection strategies rather than traditional IT or cybersecurity spend.

Workers’ Compensation and Employment Coverage

Workers’ compensation insurance is required in most states when you have employees. Premiums paid for this coverage are generally deductible, as are certain employment-related insurance policies that protect the business from workplace claims.

8. Travel, education, and industry involvement

Travel and education expenses are common for freight brokers, especially those focused on building carrier relationships, staying current on industry changes, or developing their teams. When these expenses are tied directly to the business, they are often deductible.

The key is intent and documentation. The expense should have a clear business purpose, not primarily personal.

Common deductible expenses in this category include:

• Business travel, including flights, hotels, and ground transportation
• Meals while traveling for business (generally subject to limits)
• Conference and trade show registration fees
• Industry association memberships

Conferences and industry events

Trucking industry conferences and events are typically deductible when attendance is related to the business. This can include:

• Registration or pass fees
• Travel and lodging
• Event-related materials or sponsorships

If a trip mixes business and personal time, only the business-related portion of the expenses should be deducted. Keeping agendas, registration confirmations, and travel details helps support the deduction.

What not to deduct: common mistakes freight brokers make

Knowing what does not qualify is just as important as tracking deductions. Most issues come from personal expenses, poor documentation, or misclassification rather than intentional misuse.

• Home office deductions – Working from home occasionally or taking after-hours calls does not qualify a space as a home office. The space must be used regularly and exclusively for business.
• Meals and entertainment – Only meals with a clear business purpose are potentially deductible, and limits often apply. Casual meals or day-to-day food costs do not qualify.
• Vehicle expenses – If mileage or vehicle expenses are claimed, consistent tracking is required. Estimates or recreated logs increase risk.
• Mixing personal and business spending – Using personal accounts or credit cards for business expenses makes documentation harder and deductions more difficult to support.

When in doubt, being conservative and keeping clean records makes tax season easier and reduces risk.

Make tax prep easier while protecting cash flow

Tax deductions are not about getting creative. They are about making sure the real costs of running a freight brokerage are visible, documented, and categorized correctly. When expenses are tracked consistently throughout the year, tax prep becomes less stressful and far more accurate.

Clear financial reporting plays a big role in that, especially when cash flow is under pressure. When receivables, carrier payables, and financing costs are clearly bucketed, it becomes easier to see where money is tied up, what has already been paid, and how cash is moving through the business.

For brokers using Denim by Truckstop, factoring does more than support day-to-day cash flow. Built-in reporting clearly separates receivables, payables, and factoring fees over a specific period, and integrates easily with accounting software to streamline tax reporting. That visibility supports cleaner P&Ls, fewer surprises at tax time, and more informed conversations with your accountant.

When cash flow and reporting are handled together, brokers spend less time untangling numbers and more time running the business.

If you’re looking for a factoring partner that helps you stay paid, stay organized, and stay prepared for tax season, Denim by Truckstop is the financial partner for you.

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The guidance we’ve outlined here may change based on your specific business, tax situation, and other factors. Consult your tax advisor for tax recommendations specific to your business.