Truck Driver Tax Deductions You Need to Know

Keeping track of all your expenses—like fuel, food, and truck maintenance—in an organized way throughout the year can make tax season more manageable. Organized records simplify tax preparation and help you maximize eligible deductions. 

But what business expense receipts and documentation do you need to keep? And which tax deductions can you claim? To help you set up good recordkeeping habits that will pay off at tax time, we’ll explore the documentation you need, common tax deductions for trucking businesses, and non-business tax credits that could help you save even more money. 

Everyone’s situation is different, so you should always get individual advice from your tax professional. This article is intended for general informational purposes and should not be considered a complete resource on tax deductions. For official tax guidance, please refer to Internal Revenue Service (IRS) regulations and seek advice from a qualified tax professional.

What are truck driver tax deductions?

Truck driver tax deductions are tax offsets for business-related expenses that can help lower your taxable income. When you claim these deductions, it can lower the taxes you owe at the end of the year.

Tax deductions vs. tax credits

While tax deductions reduce your taxable income, tax credits directly lower the amount you owe. Currently, there are no business-related truck driver tax credits for self-employed owner-operators.

Who can claim truck driver tax deductions?

Changes in the tax code have limited the eligibility for claiming truck driver expenses when filing taxes. Only self-employed individuals, such as owner-operators or independent contractors, can qualify for these deductions. Company drivers who get a W-2 during tax season are not eligible to claim these expenses.

You can tell whether you qualify by looking at what type of tax documents you receive. If you get a W-2, you’re a company driver and do not qualify. If you receive one or more 1099 forms, you can take advantage of various truck driver tax deductions.

SEE ALSO: What Is Hot Shot Trucking?

18 truck driver tax deductions that will save you money

Here is a breakdown of common deductible business expenses you can claim on your taxes as an owner-operator. Remember, you must provide receipts or other documentation to claim tax deductions.

1. Insurance premiums

You can write off the expenses for insurance premiums related to your business. This could include commercial liability, property damage insurance, and even business interruption or loss of cargo insurance.

If you cover the cost of your own health insurance, you can still deduct it from your taxes, but it’s not considered a business expense. Instead, there’s a designated section on your tax return to claim deductions for health insurance payments.

2. Association dues

Your membership fees or dues are tax-deductible if you belong to a union or another trucking association. Just remember that to qualify, the group must be directly related to truck driving or the trucking industry. 

Membership in professional organizations can provide training, networking opportunities, and industry information that can enhance your career. Keeping track of dues and any associated benefits can further strengthen your case for deductions at tax time.

3. Cell phone plans

If you have a separate cell line that you use just for your trucking business, you can deduct the entire cost of the plan. However, if you use it for personal and business reasons, you’ll need to figure out what percentage of the time you use it for each purpose and deduct the work-related portion. 

To accurately track this, consider keeping a log of your phone usage or utilizing apps that can help you categorize calls and data usage. Additionally, any accessories specifically for your business, such as a Bluetooth headset or car charger, can also be deducted as business expenses.

4. Personal electronic devices

Like your cell phone plan, you can deduct the full cost of any phone, laptop, tablet, or other electronic device you use only for work. If you use it for both business and personal reasons, you can deduct the portion that is related to work. Software or applications you purchase specifically for business purposes, such as navigation apps, dispatch software, or industry-related technology tools, can also be included in your deductions.

5. Education and training

You can deduct expenses for truck driver school or other training to maintain your CDL license if you paid out-of-pocket. Other education may be tax deductible, too, as long as it’s directly related to your business or trucking career. As a self-employed owner-operator, this might include business courses to help you learn to better manage your small business and business expenses.

Investing in your skills can also lead to better job opportunities and higher earnings. For example, you might receive specialized training in hazardous materials to enhance your value. 

6. Meal expenses

You can only deduct meal expenses if you’re away from home long enough to need a break for sleep or rest. Carriers that travel regionally or long-haul likely qualify, while those that drive locally probably don’t. Drivers subject to hours of service regulations can claim 80% of meal expenses purchased on the road.

You have two options when it comes to meal expense deductions:

1. Keep your receipts: Keep all your meal receipts and claim your actual meal expenses, including tax and tip.
2. Use the per diem allowance: The other option is to use the per diem allowance, which is the daily non-taxable reimbursement permitted by the federal government to cover meals and incidental travel expenses. 

Per diem is calculated in centers per mile. The IRS uses the official General Services Administration (GSA) per diem rates. Be sure to look up the rates by following the relevant IRS rules.

7. Medical expenses

As a condition of employment, drivers may be required to get regular medical exams. You can deduct any out-of-pocket costs for these required exams. However, medical exams or treatments that are not specifically related to your job can only be deducted as personal expenses. These can be claimed only if you itemize your deductions rather than doing a standardized deduction.

8. Business clothing

Any specialized clothing or safety gear required for your job, like a company logo shirt, a back brace, steel-toed boots, or safety goggles, can be tax-deductible. Regular everyday clothing does not qualify, even if you wear it while driving. If you attend industry events or training sessions that require specific attire, you can include those costs in your deductions. Just be sure to keep track of these expenses to ensure compliance with tax regulations.

9. Dispatch fees

If you pay for dispatch services for your loads, you can claim them as a business expense. Just make sure to track them and keep all invoices or receipts throughout the year.

10. Licensing fees

You can deduct the cost of state or local government required business licenses. You can also deduct the cost of your CDL license and any other licenses required to conduct your business.

11. Load expenses

These expenses include any specialized items you buy to help safely carry your loads. Examples include chains, locks, straps, and even wide-load flags.

12. Tools and equipment

A tool kit is necessary to do your job safely and effectively and is considered an approved tax deduction. Hammers, wrenches, pliers, tire irons, chains, and even electrical tape are all tax deductible.

13. Fuel and travel expenses

You are required to file quarterly International Fuel Tax Agreement (IFTA) reports, separate from your annual taxes. Fuel taxes you pay and the rest of your fuel costs from the road are deductible at tax time. If you use a transportation management system (TMS) such as Truckstop ITS Dispatch to help with your IFTA reporting, you’ll already have all your fuel tax information at your fingertips when it’s time to file your income taxes.

You can also claim related travel expenses, such as tolls, hotel costs, and parking fees, as long as you incur them on the job.

14. Office expenses

As a self-employed owner-operator, you likely incur some traditional office expenses while running your business. Postage, photocopying, faxes, accounting software, load board software, calculators, and even pens are all deductible at tax time.

15. Subscriptions

Do you subscribe to any magazines or websites focused on the trucking business or industry-related information? If so, you can deduct the total cost of those subscriptions.

16. Occupational and excise taxes

If you pay these taxes throughout the year, you can deduct them at tax time. Remember to keep records showing what you paid.

17. Truck repairs and maintenance

Since your truck is considered a qualified, non-personal-use vehicle, you can deduct 100% of all vehicle expenses for truck repair and maintenance, including tires or vehicle washes. Other vehicle expenses include loan interest and depreciation if you financed the purchase. While some industries offer a standard mileage deduction, in the trucking industry, you must deduct your actual vehicle expenses.

18. Sleeper berth expenses

You can claim expenses associated with setting up your sleeper berth since they are considered necessary for working on the road. Items in this category include a mini-fridge, coffee maker, curtains, bedding, food storage containers, and even first aid supplies.

Additional tax credits

Although these are not specific to the trucking business, you may also qualify for additional tax credits. In some cases, these are refundable. If the credit is bigger than the total tax you owe, you’ll get the difference back as a tax refund.

Examples include, but are not limited to, the following:

• Child and dependent care credit: This is for those who pay childcare expenses for someone under age 13 or who are responsible for someone of any age who is unable to care for themselves.
• Earned income tax credit: This credit is designed to offset the cost of Social Security taxes. It’s available to adults whose income falls below a certain threshold (based on filing status).
• Educational credits: If you’re taking classes, you might qualify for one or both tax credits offered to students.

Note that each tax credit has different eligibility requirements, including income level. Things change yearly, so if you meet the basic eligibility criteria, such as being a parent for the child and dependent care credit, it makes sense to apply even if you’re not sure you qualify.

Non-deductible truck driver expenses

You can deduct most business expenses associated with your job, but not everything. These items are not deductible business expenses:

• Reimbursed expenses:If someone else, such as the carrier you’re contracted with, pays you back for your expenses, you can’t then claim them on your taxes.
• Home or personal cell phone: You can’t deduct the costs of a landline at home or a personal cell phone not used for business purposes.
• Commuting expenses: You can’t count mileage for your drives between home and the location where you regularly start or end your trips.
• Local route meals: You can’t deduct your daily meals when driving local routes in your home area.
• Everyday clothing: Even if you wear it exclusively when driving your truck, you cannot deduct everyday clothing such as jeans and T-shirts.
• Personal trips: You can’t deduct any expenses for a personal trip, even if you’re using your business vehicle. You must be actively working for tax deductions to apply.

4 Tips for effective recordkeeping

Keeping records helps maximize deductions and simplify tax preparation for truckers. With the right strategies, you can take advantage of every deduction available to you. Here are some tips to help you stay organized throughout the year.

1. Maintain a dedicated folder.

Create a physical or digital folder to store your receipts, invoices, and other relevant tax documents throughout the year. Categorize the expenses that make sense for your business, such as fuel, maintenance, meals, lodging, insurance, and equipment purchases. You can use labeled filed folders or binders to keep your receipts and invoices organized. 

Make it a habit to update your folders regularly. At the end of each week or month, take time to sort through your records, organize them, and make sure you’re capturing the right expenses promptly. 

2. Regularly review your records.

Set a schedule to review or update your records. That way, you know you’ve collected the right documents and corrected any issues quickly. Whether it’s a few hours at the end of each month or when you’re not busy, make sure everything is accounted for. 

If you notice any discrepancies, address them right away. For example, you might reach out to vendors for missing receipts or to clarify unclear expenses. The sooner you correct issues, the better. Reviewing records also gives you a glimpse into your spending habits. Are there areas where you consistently overspend? Tracking these patterns can help you budget and manage expenses better in the future.

3. Consult a tax professional.

While self-managing is important, consulting a tax professional can be immensely helpful. Professionals can also ensure you’re getting the tax deductions you qualify for. You can make the most of this partnership through:

• Regular checking: Schedule periodic meetings with your tax professional throughout the year to stay informed about tax law changes that might impact your deductions or overall tax strategy. 
• Tailored advice: Tax professionals can personalize advice for your situation. They can also help you identify deductions you might not be aware of and ways to maximize your tax savings. 
• Tax preparation support: When tax season arrives, having a tax professional on your side can help you ensure accuracy and compliance. They can help you file taxes, ensuring that you don’t overlook any important details.
• Long-term planning: Beyond immediate tax preparation for truckers, tax professionals can help plan for the future. You can get help planning for retirement, paying estimated tax payments, and finding other strategies to improve your financial situation over time.

4. Use a TMS. 

Filing taxes as a self-employed truck driver can be complex. Make it easier with a transportation management system like Truckstop ITS Dispatch. A TMS makes logistics simpler and assists with recordkeeping and maximizing profitability: 

• Easy dispatch: Truckstop ITS Dispatch lets you manage dispatching tasks while calculating payroll. You can focus on your operations without getting bogged down by administrative tasks. With accurate payroll records, you can substantiate your labor costs during tax time.
• Easy organization: The TMS provides comprehensive reporting features. It gives access to statistics, settlements, and detailed customer rate agreements. By organizing key financial data in one place, you can find the information you need during tax season. This ensures you don’t miss out on any eligible deductions.
• Paperless IFTA reporting: One of Truckstop ITS Dispatch’s standout features is its automated IFTA reporting capability. It simplifies the process of filing quarterly fuel tax reports, reducing the stress associated with tax time. This feature ensures fuel expenses are accurately recorded, making it easier for you to claim deductions related to these costs.

With detailed records and reports at your fingertips, you’ll be well-prepared to file your taxes accurately and claim deductions for your trucking business. By integrating a TMS into your operations, you can focus more on driving and less on paperwork, making tax season more manageable.

Simplify tax reporting with Truckstop.

Understanding truck driver tax deductions can help you save, but filing can be tricky on your own. As tax regulations evolve, staying updated and organized will help you navigate the complicated process. For tailored advice, always consult a tax professional or high-quality online solution to take you step-by-step through your filing. And, of course, make sure you’re diligent about expense tracking. Know your numbers, and report everything accurately.

A TMS like Truckstop ITS Dispatch simplifies and streamlines your logistics throughout the year. At tax time, you’ll have access to the detailed records and reports you need to file your taxes accurately. That way, you can claim deductions for your trucking business. See for yourself in our self-guided tour.