7 Essential Income Tax Forms For Truck Drivers
Whether you are an owner-operator or driving trucks for your employer you need to know the IRS forms for truck drivers when you file your taxes. In this article, you will learn about 7 essential Income tax forms for truck drivers.
First, you need to determine whether you are an owner operator, or an employee. In other words, you have to choose between 1099 vs W2 employees.
Generally, when your client can only control or direct the result of the work instead of its mechanism then you are considered an independent contractor and you will need to know what taxes forms do owner-operators pay.
Once your status is determined then you can start your tax preparation. For this, you will need to familiarize yourself with the trucker driver tax deductions and the relevant IRS forms. Here is a list of 7 essential Income tax forms for truck drivers.
1. Form 1040
It is mandatory for every taxpayer to file the IRS Form 1040.
Owner-operators are classified as independent contractors and will have to file some additional schedules along with Form 1040 such as Schedule C which is used to report your revenue and business expense, and Schedule SE to compute your social security and medicare taxes.
Owner operator tax forms might include Form 1040-ES. If your tax liability is expected to be $1000 or more then you need to calculate and pay your estimated taxes to the IRS by using Form 1040-ES.
2. Form 1099
If your truck driving services are classified as an independent contractor and your payment equals $600 or more you will receive Form 1099 from your client. You will use this form to figure out your business income while filing your tax returns.
As an owner-operator, you are not entitled to get the benefits that an employee receives. No social security, medicare taxes, or any government taxes are withheld from your compensation. You are solely responsible to figure out which taxes you are liable to pay.
3. Form 2106
If you provide your services as an employee then you will use Form 2106 also known as Employee Business expenses to deduct all the ordinary and necessary expenses incurred during the tax year while performing your duty.
To claim your business-related expenses such as travel expenses you will need to opt for itemized deduction as opposed to the standard deduction. It is important to keep a comprehensive record of your expenses so it becomes easy for you to compute them during the tax season.
Additionally, these records will come in handy in case the IRS decides to audit you.
4. Form 2290
If your truck is categorized as a Heavy Highway Use Vehicle on a public highway then you are liable to pay excise tax by filing Form 2290.
The heavy vehicle use tax or HVUT is assessed on a yearly basis for vehicles weighing 55,000 pounds or more (gross weight) operating on public highways. There are specific guidelines to determine the weight of these heavy vehicles.
5. Form 8849 Schedule 6
To claim any taxes paid in excess such as excise taxes use the Form 8849 schedule 6.
6. Form 8936
Form 8936 is used for claiming the tax credit for qualified plug-in electric drive motor vehicles. You will be eligible for this credit if you meet certain conditions.
According to the Internal Revenue Code (IRC) Section 30D, the four-wheeler cars and trucks with a gross weight of fewer than 14,000 pounds might be eligible for a credit ranging from $2,500 to $7,500. How much credit can be claimed will depend upon the capacity of the electric battery among other things.
It is important to note that tax credits reduce your tax liability whereas tax deduction lowers your taxable income.
7. Form W-2
Employers who annually pay more than $600 or more as a salary to their employees are required to file a W-2 Form for every employee they hired. When the trucking company pays you a consistent amount as their employed driver including employment benefits then they will send you a w-2 Form.
This form contains the details of the tax deductions from your annual pay. As an employee, your social security and medicare will be withheld from your earnings which the employer remits to the IRS. You will receive this form by January 31st each year and will use it to report your taxes on Form 1040.
You are not required to file all IRS forms for truck drivers. It is recommended that you consult a tax professional to find out exactly which income tax forms for truck drivers you should be using to report your income and spending during the tax year.