19 Truck Driver Tax Deductions That Will Save You Money
As a truck driver, your business is on the road. And managing all your expenses, from fuel to food to truck maintenance, in an organized way throughout the year, can make tax time more manageable.
But exactly what documentation should you be keeping? And what tax deductions can a truck driver claim, what are the standard deductions you can apply, and which drivers are eligible?
To help you set up good record keeping habits that will pay off at tax time, we’ve outlined common costs that can be truck driver tax deductions or truck driver tax credits.
Note that everyone’s situation is different, so you should always get individual advice from your own tax professional.
Who can claim truck driver tax deductions?
Until a couple of years ago, some truck driver tax deductions were available to everyone. But now, due to changes in the tax code, only those who are self-employed can claim truck driver expenses when filing taxes. This means you must be an owner-operator or an independent contractor, rather than a company driver, to be eligible.
You can tell whether you qualify by looking at what type of tax documents you get at the end of the year. If you get a W-2, you’re a company driver and do not qualify. If you get one or more 1099s as an owner-operator you can claim all available tax deductions for truck drivers.
19 truck driver tax deductions that will save you money
Here’s a look at common deductions and business expenses truck drivers can claim on their taxes. Remember, you must provide receipts or other documentation to claim tax deductions.
You can deduct the cost of business-related insurance premiums as a business expense. This could include commercial auto liability, property damage insurance, and even business interruption or loss of cargo insurance. If you pay for your own health insurance, you can also deduct that, but not as a business expense. There’s a separate place on your tax return for health insurance.
If you’re part of a union or other trucking association, your membership fees or dues are considered a tax deduction. Just remember that to qualify, it must be a group that is directly related to being a truck driver.
Cell phone plans
If you have a separate cell line that you use just for work, you can deduct the entire cost of the plan. If you use it for both personal and business reasons, you’ll need to figure out what percentage of the time you use it for each purpose and deduct the portion that’s work-related.
Personal electronic devices
Like your cell phone plan, you can deduct the full cost of any phone, laptop, tablet, or other electronic device that you use only for work. If you use it for both business and personal reasons, you can deduct the portion related to work.
If you pay for truck driver school or other training to maintain your CDL license, you can deduct those expense. Other education may be tax deductible too, as long as it’s directly related to your trucking career. As a self-employed trucker, this might include business courses to help you learn to better manage your small business and business expenses.
You can only deduct meal expenses if you’re away from home long enough to need a break for sleep or rest. If you drive locally, you probably don’t qualify. Drivers that travel regionally or long-haul probably do. Drivers who are 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. You can either keep all your meal receipts and claim your actual expenses, including tax and tip, or you can use the per diem allowance. With this method, you simply claim a set amount per day, which varies by location. The IRS uses the official General Services Administration (GSA) per diem rates.
Be sure to look up the rates for each state and city on your trip. You’ll need to follow all the relevant IRS rules.
As a condition of employment, drivers may be required to get regular medical exams. You can deduct any out-of-pocket costs for required exams.
However, any medical exams or treatments that are not directly work-related are only deductible as personal expenses. You can only claim them if you itemize deductions rather than taking the standard deduction.
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 used as a tax deduction. Regular everyday clothing does not qualify, even if you wear it while driving.
If you pay dispatch fees 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.
If your state or local government requires you to get a business license, you can deduct that cost. You can also deduct the cost for your CDL license and any other licenses required to conduct your business.
These expenses include any specialized items you buy to help safely carry your loads. Examples include chains, locks, straps, and even wide-load flags.
Tools and equipment
If you’re like most truckers, you probably carry a tool kit in your truck. Things like hammers, wrenches, pliers, tire irons, chains, and even electrical tape are all tax deductible.
Fuel and travel expenses
Separate from your annual taxes, you’re required to file quarterly International Fuel Tax Agreement (IFTA) reports. Fuel taxes that you pay, along with the rest of your fuel costs from the road, are deductible at tax time. If you use a TMS such as Truckstop’s 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 they are incurred while you are on the job.
Note that for truckers, there is no per diem for lodging. You’ll have to keep receipts and claim your actual travel expenses.
As a self-employed trucker, you likely incur some traditional office expenses while running your business. These include things like postage, photocopying, faxes, accounting software, calculators, and even pens.
Do you subscribe to any magazines or websites focused on the trucking business? If so, you can deduct the full cost of those subscriptions.
Occupational and excise taxes
If you pay these taxes during the course of the year, you can deduct them at tax time. Remember to keep records showing what you paid.
Truck repairs and maintenance
Since your truck is considered a qualified, non-personal-use vehicle, you can deduct 100% of all the costs for truck repair and vehicle maintenance. This includes tires or getting your vehicle washed. Additional vehicle expenses include depreciation, as well as loan interest if you financed the purchase. While some industries offer a standard mileage deduction, in the trucking industry you must deduct your actual costs.
Sleeper berth expenses
In addition to claiming any hotel nights you pay for while on the road, you can also claim the expenses associated with setting up your sleeper berth. Items that fall into this category include a mini-fridge, coffee maker, curtains, bedding, food storage containers, and even first aid supplies.
Non-trucking 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:
- 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 taxable income falls below a certain threshold (based on filing status).
- Educational credits. If you’re taking classes, you might qualify for one or both of the tax credits offered to students.
Note that each tax credit has different eligibility requirements, including income level. Things change from year to year, 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
It’s important to remember that if you’re a company driver who receives a W-2, you cannot deduct truck driver expenses at all. If you’re self-employed and receive one or more 1099s, you can deduct most expenses, but not everything. In particular, these items are non-deductible:
- 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. If you have a landline at home, or you carry a personal cell phone along with your business cell, you can’t deduct those costs. Only costs that are part of doing business qualify.
- Commuting expenses. You can’t count mileage for your drives between home and the location where you regularly start your trips.
- Local route meals. When you’re driving local routes in your home area, you can’t deduct your daily meals.
- Everyday clothing. Even if you wear it exclusively when driving your truck, everyday clothing such as jeans and T-shirts cannot be deducted.
- Personal trips. Even if you decide to drive your truck, you can’t deduct any expenses for a personal trip. You must be actively working for tax deductions to apply.
Use a TMS to simplify tax reporting.
Filing self-employment taxes is complicated. Unless you happen to be a tax pro, it’s best to use either a tax professional or a high-quality online solution that will take you step-by-step through your filing. But you’ll still need to know your numbers and report everything accurately.
A transportation management system (TMS), like Truckstop ITS Dispatch, simplifies and streamlines your logistics throughout the year. And at tax time, you’ll have access to the detailed records and reports you need to accurately file your taxes and claim the deductions you are owed. See for yourself in our self-guided tour.
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