Being a truck driver or owner-operator is tough. You need to get a trucking business license or commercial driver’s license, spend long hours on the road, and handle vehicle maintenance and repairs. All these expenses can add up, often costing you more out of pocket than many other careers.
When tax season arrives, you might not be aware of all the tax deductions or write-offs available to you. Items like medical expenses, lodging, education, and even clothing can sometimes be deducted. Below, we’ll help you determine if you qualify for certain tax deductions and introduce you to eight truck driver write-offs you may not have known about.
Who Can Claim Truck Driver Tax Deductions?
Due to changes in the tax laws (the Tax Cuts and Jobs Act), only self-employed truck drivers can claim expenses on their taxes. This means you must be a contract driver or owner-operator to qualify, not a company driver.
Here’s how to check if you’re eligible:
- W-2 Form: If you receive a W-2 form at the end of the year, you’re a company driver. Unfortunately, you can’t deduct any job-related expenses.
- 1099 Forms: If you receive one or more 1099 forms, you’re considered self-employed. You can use these forms, along with your income and expense records, to claim truck driver tax deductions.
To claim these deductions, you’ll need to fill out a Schedule C Form, which details your income and expenses.
8 Types of Truck Driver Tax Deductions
As a truck driver or owner-operator, you might not know how many parts of your daily work can be tax-deductible. Here are eight tax write-offs for truck drivers:
1. Insurance
As a truck driver, you can deduct the costs of various insurance policies related to your work, such as commercial auto liability, property damage insurance, and loss of cargo insurance. These are considered business expenses.
If you also pay for health insurance, you can deduct that separately. Use Schedule 1 Form 1040 to deduct the costs of health, vision, and dental insurance for you and your family.
2. Medical Expenses
Truck drivers often need regular medical and fitness exams for their job. These costs can be deducted as business expenses.
However, personal medical expenses like hospital visits or medications are not considered business expenses. You can only deduct these personal medical costs if you itemize your deductions on Schedule A, instead of taking the standard deduction.
3. Work Clothing, Meals, and Personal Products
As a truck driver, you can deduct various work-related expenses:
Clothing and Safety Gear: You can deduct items like a back brace, safety goggles, steel-toed boots, or a company-branded shirt. Personal clothing worn while driving is not deductible.
Meal Expenses: If you’re away from home long enough to rest and eat, you can deduct meal expenses. Long-haul or regional drivers can claim up to 50% of meal costs. If you follow the Department of Transportation’s “hours of service” limits, you can claim up to 80% of your meal expenses. Keep your receipts or use the per diem method, which sets a daily amount based on location.
Personal Products: You can write off items needed for long hours on the road, such as:
- Cooler or mini-fridge
- Cleaning supplies
- Sunglasses
- Logbook
- Alarm clock
- GPS
- Bedding
- Gloves
- Flashlight
These deductions can help reduce your taxable income and save you money.
4. Dispatch and Licensing Fees
As a truck driver, you can claim several additional deductions:
Dispatch Fees: You can deduct the fees you pay for your truckloads. Be sure to keep track of these fees throughout the year, just like your other expenses.
Licensing Fees: If your local or state government requires you to have a business license, you can deduct the cost of this license.
Commercial Driver’s License (CDL): You can also deduct the cost of maintaining your CDL or any other essential licenses needed for your business.
Keeping records of these expenses can help you save money when tax season comes around.
5. Fuel and Other Travel-Related Costs
As a truck driver, you can deduct several work-related expenses:
Fuel and Trucking Costs: You can deduct fuel costs, tolls, and parking fees as long as they are part of your job.
Hotel Costs: If you need to stay in a hotel because you’re working long hours and away from home, you can deduct these expenses. Remember, there’s no daily allowance (per diem) for lodging like there is for meals, so keep your receipts to claim these expenses.
Fuel Taxes: Truckers must file quarterly International Fuel Tax Agreement (IFTA) reports, separate from annual taxes. You can deduct the fuel taxes and costs you pay while on the road.
Keeping track of these expenses can help reduce your taxable income and save money.
6. Truck/Vehicle Expenses
Keeping your truck in top condition can be expensive, but many of these costs are tax-deductible. As a truck driver, you can deduct expenses like maintenance, repairs, and depreciation because trucks are considered non-personal-use vehicles.
Here are some deductible costs:
- Maintenance and Repairs: This includes washing your truck, getting new tires, and other upkeep.
- Loan Interest: If you financed one or more trucks, you can deduct the interest on your loan.
Remember, unlike some industries that use a standard mileage deduction, truckers must deduct the actual costs. Keeping track of these expenses can help reduce your taxable income and save money.
7. Education
As a truck driver, you can deduct various education and training costs. Here’s how:
- CDL Costs: You can deduct the expenses for getting and maintaining your Commercial Driver’s License (CDL).
- Truck Driving School: If you pay for truck driving school or other training to obtain your CDL, these costs are deductible.
- Career-Related Education: If you take courses directly related to your career, those expenses may also be tax-deductible. For example, if you’re a self-employed trucker, you might be able to write off business courses that help you learn how to start and manage your small business.
To qualify, the education must improve your skills or be necessary for your job. Keeping track of these expenses can help reduce your taxable income and save money.
8. Association Dues
If you’re a truck driver and part of a trucking association or union, you can deduct the dues, membership fees, and other required expenses. These costs are deductible if they are directly related to your career as a truck driver.
This means you can save money on your taxes by keeping track of these fees and claiming them as deductions.
Conclusion
Owner-operators have many financial benefits, especially with numerous tax deductions available. To ensure you’re getting all the deductions you’re entitled to, it’s crucial to meet with a financial professional like Taxhub. The professionals at Taxhub review your expenses and help you maximize your profits while minimizing your tax payments. You can see their pricing plans here, and if you wish to save on them, use our Taxhub coupons to maximize your savings and increase your advice.
Taking the right steps can make your business stronger financially. For more information on filing taxes and other related concerns, you can get a free consultation or check out our virtual tax prep services.