10 Truck Driver Expenses That You Can Take Advantage Of
Tax deductions for truck drivers were available to all until a couple of years ago. Currently, only self-employed individuals can claim truck driver expenses on their taxes due to a change in the tax code. In other words, the only driver eligible is an owner-operator or a contractor, not a company driver.
By looking at the types of tax documents you receive at the end of the year, you can determine whether you qualify for the tax credit. Getting a W-2 indicates that you are an employee and are therefore not eligible. It would be nice if you received one or more 1099s. If you received any, congratulations, you can claim all the trucker tax deductions. Schedule SE may also be required to report self-employment taxes. The two forms are filed together while filing income tax with your Form 1040 tax return.
Owner-operators are only entitled to certain tax breaks, while others are only available to company drivers. Local drivers are generally not eligible for these deductions.
10 Tax Deductions for Truckers That Will Help You Save Money
So, what expenses can a truck driver deduct? A few common expenses that you can claim a deduction for are listed below:
Insurance Premiums
Insurance-related to your business can be deducted as a business expense. Commercial auto insurance, property damage insurance, business interruption insurance, and cargo insurance are all possible types of coverage. In some cases you can deduct your own health insurance as part of your business expenses, but not as a deduction. Health insurance is listed separately on your tax return.
Truck Repairs and Maintenance
All repairs and maintenance costs for your truck can be deducted to the full extent of the law because it is not used for personal reasons. Getting your vehicle washed or getting tires replaced is an example. The vehicle expense list also includes depreciation, loan interest, and other fees associated with the purchase. Trucking is one of the few industries that does not offer a standard mileage deduction, but you can deduct your actual expenses.
Meals
Driving locally or long-distance can impact whether you can deduct meals. To begin, you need to figure out where your "tax home" is, which is either your home address or business headquarters. The meals can be deducted only while away from your tax home overnight, or for a period of time that requires you to sleep or rest. Drivers who drive locally cannot deduct food and drink costs. Drivers who drive long distances can do so.
Office Expenses
When running your own business, self-employed truckers are likely to incur some traditional office expenses. Items such as postage, copies, faxes, accounting software, calculators, and even pens fall into this category.
Cell Phone Plans
You can deduct the entire cost of a cell phone plan that you use only for your job. You must determine what percentage of the time you use it for each purpose if you use it for both personal and business purposes. If the portion is work-related, you can deduct it.
Medical Costs
You can deduct medical fitness assessments as a business expense if you are required to get them as part of your job. You can deduct only personal medical expenses, not business expenses, for any procedures that are not directly related to your work. If you itemize deductions, they can be claimed instead of the standard deduction.
Subscriptions
Is there a magazine or website dedicated to the trucking industry that you subscribe to? Then these subscriptions can be deducted in their entirety.
Travel Costs
If you are away from your tax home overnight (or for a long enough period of time that requires rest), you are entitled to deduct those travel costs. This includes hotels or other accommodations, tolls, and parking. Truck drivers are required to claim actual lodging expenses regardless of the per diem rate in other industries. Per diem rates cannot be claimed in the same way as meal expenses.
Taxes and Licenses
Including the Heavy Highway Vehicle Use Tax and CDL license fees, you can deduct any taxes and licenses you pay for your business.
Sleeper Berth Expenses
The expenses associated with setting up your sleeper berth can also be claimed along with any hotel nights paid on the road. Mini-fridges, coffee makers, curtains, bedding, food storage containers, and even medical supplies fall into this category.
Is There Anything That Cannot Be Deducted?
Some common trucking costs are not deductible, including:
- Everyday clothing
- Costs associated with traveling to and from your office
- Telephone line at home
- Reimbursement of expenses
- Meals and travel expenses for a personal vacation