Truck driver truck driver tax deductions

There are many benefits that come with being a Truck Driver. While you probably know all about the freedom and job security, you may not be aware of the important tax deductions available to you.

That’s right, while tax season might be a point of pain for some professions, it can actually be a beneficial time for Truck Drivers. In fact, there are significant tax deductions truck drivers are qualified for.

So, to find out more about what you can do to earn these deductions, this article will cover everything you need to know.

Common Truck Driver Tax Deductions

There are many deductions truck drivers may qualify for that will provide great benefits during tax season. Luckily, we’ve outlined a comprehensive list of some of the most common deductible items:

1. Association Dues

   If you’re part of a union or some other trucking association that requires regular fees, you can typically deduct these fees from your taxes. That’s because these fees would be considered a business requirement or something that helps you with your truck driving career.

   Association Dues are one of the few tax deductions that may be available to truck drivers who work for companies, as well as being available to Owner-Operators.

2. Cell Phone, Computer, etc.

   Electronic devices like cell phones, computers, and tablets are regularly used as tax deductibles, even for individuals who aren’t truck drivers. That’s because any device you use exclusively for work will always be 100% deductible. Therefore, you can claim the full cost of the device, your monthly data cost, and/or your internet cost.

   However, it is important to note that your personal devices are not 100% tax-deductible. Instead, these devices may have a percentage of their expenses deducted if you use them for personal and business purposes.

3. Clothing

   While you can’t get carried away and try to deduct clothing unrelated to your work, there are some types of clothing that could be tax-deductible. For example, if you’re a truck driver who regularly transports hazardous chemicals and you need to wear special safety equipment, you can likely deduct that clothing.

   Overall, common clothing items you may be able to deduct as a truck driver include: goggles or back braces, safety gloves, or HAZMAT gear.

4. Education

   If you need to pay out of pocket for your CDL training or to acquire advanced certifications, you should be able to deduct those costs from your taxes. Earning these skills improves your ability to perform in your current line of work, so they can almost always be tax deducted.

   Of course, keep in mind that relevance matters. For example, if you’re currently a truck driver but earned an associate’s degree in environmental science, you likely won’t be able to deduct the cost of that degree from your taxes.

5. Tools and Equipment

   If you’re an Owner-Operator and you own the tools and equipment you use, you can claim these items as tax deductions. If you’re not sure what types of tools and equipment would apply, here is a list of commonly claimed items:

   • Chains

   • Tarps

   • Ratchet straps

   • Bungee cords

   • Duct tape

   • Tire irons

   • Flat Jaw Vise Grips

   • Air Gage/Hose

   • Oil and Windshield Washer fluid

6. Insurance

   Also, specifically for Owner-Operators, any insurance used to cover your truck (commercial auto liability and property damage insurance), as well as cargo insurance and other business insurances are tax-deductible. The best way to do so is by deducting your premiums as a business expense.

   Additionally, you may be able to deduct any health insurance coverage you pay for. However, this will not count as a business expense and must be filed on a separate Schedule 1 Form 1040.

7. Meal Allowance

   Owner-Operators also have the ability to deduct meals as a business expense and can do so to an even greater degree than most self-employed employees. For instance, IRS typically allows industries to deduct 50% of meals, but many truck drivers can claim up to 80% of their actual meal expenses.

   Though, do keep in might that local drivers are less likely to qualify for these deductions than long-distance drivers. Be sure to research your state and local government and how your hours of service affect your ability to deduct meals.

   Then, once you know you’re eligible, you’ll have two different options available to you when filing. First, you can choose the actual expense method. This method is more work but also more exact, as you’ll report what you spent on each meal (including taxes and tips) and then deduct that reported amount.

   On the other hand, the per diem allowance will allow you to deduct a set amount per day. This is significantly less work but also means you could be missing out on the extra deductions. In general, the special standard meal allowance in the U.S. is $63 per day and $47.25 for a partial day.

8. Travel Expenses

   When you’re away from your “tax home” overnight and incur expenses, as many self-employed truck drivers do, you’ll be able to deduct those expenses from your taxes as well. Some common examples include the cost of:

   • Hotels & other lodgings

   • Tolls

   • Parking

   However, keep in mind that your “tax home” is a highly important factor here. You can’t satisfy the need for the deduction by napping in your vehicle but must have reason to take a significant rest period. For this reason, long-distance drivers are more likely to qualify for travel expense deductions than local drivers.

   To understand how your tax home can affect these deductions, here are some examples to identify your tax home:

   • Regardless of where you live, your tax home is your regular place of business.

   • Your tax home will include the entire city, town, etc., where your business is located.

   • If you have multiple business locations, your tax home will be your main place of business (your headquarters).

   • If you do not have a separate business located outside of your home, your residence may be your tax home.

   • If you do not have a place of business or residency, your tax home will be wherever you are currently working.

   With that in mind, you’ll only be able to claim travel expenses as tax deductions if the money you spend is clearly outside of your tax home.

9. Office Expenses

   Many self-employed truck drivers also rely on using an office for the management and paperwork side of their jobs. With that in mind, here are some common office supplies that are often tax deductible:

   • Postage

   • Paper and pens

   • Calculators

   • Faxing and photocopying

   • Accounting software

   • Printer

   • Desk

   When you purchase any of these items throughout the year, it’s important to keep track of receipts or bank statements so you can accurately deduct your costs.

10. Vehicle Expenses

    Last but certainly not least, vehicle expenses are one of the most important tax deductions available to truck drivers. If you own your truck or multiple trucks, here are common expenses related to those vehicles you can deduct from your taxes:

    • Depreciation

    • Fuel

    • Insurance

    • Loan interest

    • Registration

    • Repairs and maintenance

    • Tires

    • Washing

    Overall, any regular maintenance you need to perform on your truck is an important business expense and can usually qualify as a tax deduction. However, these deductions will not be valid if you don’t own or are leasing a truck.

What Are Truck Driver Tax Deductions?

Truck driver tax deductions are tax breaks that are specifically for truck drivers. Before we dive into various tax deductions trucker drivers can take advantage of, it’s important to understand what exactly tax deductions are.

In a basic sense, tax deductions are items you subtract from your taxable income that can reduce the amount you owe. Typically, you can choose to make a single deduction at a fixed amount, otherwise known as a standard tax deduction, or you can use a Schedule A form to itemize deductions.

Overall, whether you’re a small business owner or an employee, tax deductions are a simple and easy-to-use tool you can deploy to make your taxes more manageable.

Who Can Claim Tax Deductions?

As a truck driver, your employment status can have a huge effect on what tax deductions you qualify for. Unfortunately, if you’re an employee who works for a company and receives a W-2, your job-related expenses will not be tax-deductible. This is because your company technically owns the items you’d theoretically be able to deduct.

On the other hand, Owner-Operator truck drivers have many tax deduction options available to them. As a business owner with clients, you should receive 1099-NECs at year-end from any clients who’s paid you more than $600.

These documents, along with your own records, will then be used to report your trucking income and expenses on Schedule C. Other documents you might need include a Schedule SE and Form 1040 tax return.

As a self-employed Owner-Operator, you own your own equipment. Therefore, these tax documents that you file will qualify you to make certain truck driver tax deductions.

What Isn’t Tax Deductible for Truckers?

To be clear, any expenses that are unrelated to your business as a truck driver will not be tax-deductible. However, if you find yourself confused as to what is a personal expense and what is a business expense, here are some examples of items you cannot deduct from your taxes:

• Clothing that you wear every day outside of your business

• The cost of commuting between your business headquarters and place of residency

• Cost of your home/personal phones

• Travel expenses or meals on trips unrelated to your business

In all of these examples, the expenses do not directly correlate with your trucking business, meaning that they weren’t necessary for that business. This is why record keeping is so important because it can be very easy to become confused when trying to remember a year’s worth of expenses.

Truck Driver Tax Deductions FAQ

1. What expenses can a truck driver deduct?

   Truck drivers can deduct any expenses related to their business. However, these expenses must be paid for by them and not the company they work for. This is why Owner-Operators qualify for far more tax deductions than truck driver employees.

   In general, here is the list of common items truck drivers can deduct from their taxes:

   • Association dues

   • Business phones or computers

   • Safety equipment/clothing

   • Relevant education costs

   • Other tools and equipment

   • Insurance

   • Meal allowance

   • Travel expenses

   • Office expenses

   • Vehicle expenses

2. Is there a tax credit for truck drivers?

   No, there isn’t currently a tax credit for truck drivers. However, one might be passed soon. As of April 5th, 2021, a potential bipartisan bill known as the Strengthening Supply Chains Through Truck Driver Incentives Act aims to create a two-year refundable tax credit of up to $7,500 for CDL truck drivers who drive at least 1,900 hours per year.

   Though, even without this bill passed into law, truck drivers can earn huge tax deductibles. For example, a truck driver can deduct up to 80% of their meal costs, as well as up to 100% of vehicle repair costs.

3. Can truckers write off fuel?

   Yes, Owner-Operators can deduct the cost of fuel, but only for when the truck was in service. For example, if an Owner-Operator was making a delivery from New York to Ohio, they could deduct the fuel cost of that trip.

   However, when the truck isn’t being used for business purposes, the cost of fuel cannot be deducted. In other words, Owner Operators are not able to deduct any income lost from deadhead or unpaid mileage.

4. Can I use bank statements as receipts for taxes?

   No, you cannot use bank statements as receipts for taxes. While bank statements can be useful for your own personal records, they cannot be used as proof of expenditure for your taxes. This is because bank statements don’t contain the itemized details required by the IRS. Overall, here is a list of documents the IRS will accept:

   • Receipts

   • Canceled checks

   • Copies of bills

Final Thoughts

Being your own boss can be great, right up until tax season. However, tax deductions allow Owner-Operators and other truck drivers to ease that burden.

Overall, truck drivers have many different tax deductions available to them, from meal allowances to travel expenses. And these deductions are important, as meal allowances and vehicle expenses can have up to 80% and 100% of their costs deducted, respectively.

Therefore, as a truck driver, it’s vital that you understand what deductions you qualify for. That way, you can save your money and continue running a successful business.