Tax Deductions for Truckers: Start Here
Truckers tend to have a lot of tax liability, so when it comes time to file your tax return things can get tricky. Luckily truckers, both self-employed and those working with a company, have a lot of business expenses that are also tax-deductible.
Take a look at these trucker tax deductions that will help you save money.
Am I eligible for tax deductions?
As a truck driver, you can claim several tax deductions. But, first, you need to make sure you deduct business expenses that are appropriate for your work situation.
For example, self-employed drivers might be eligible for certain tax-deductions that don’t apply to truckers who work full-time for a company.
Additionally, local truck drivers, for instance, can’t claim per diem meal cost deductions because they can eat at home. Or, if you’re employed by a company, any reimbursed expenses from your employer cannot be included as a deduction in your tax return.
There are also some requirements you should know about before you can claim a deduction. First, you need to know your “tax home”, which doesn’t have to be your family home or residence. It’s typically the location of your primary place of work.
Now, let’s go through tax deductions that are available to truck drivers.
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WHAT YOU'LL LEARN...
- Commercial Truck Insurance Rates by State
- Trucking Authority: Ultimate Guide
- Trucker Tax Deductions
- Last Mile Delivery: What Trucker's Need to Know
- CDLs and Weight Class Guide for Truckers
- 5 Common ELD Mistakes Fleets Make
- How to Survive Long Distance Trucking
- How to Optimize Route Planning for Local/Regional Trucking Companies
- 7 Effective Strategies of Freight Rate Negotiation
Cellphone and internet fees: deductions from truckers' tax bills
The IRS knows that truck drivers need a cell phone and wireless internet access while on the road, which can lead to expensive mobile and internet fees.
However, this tax deduction only allows drivers up to 50% of their mobile and internet usage costs as these tools can be used for both professional and personal purposes.
Don’t get disappointed, though, because the total cost of your mobile phone itself or your laptop is deductible as well.
Medical exams and food count as tax deductions
Other expenses and fees related to truck driving that are tax-deductible include medical exams. You can deduct out-of-pocket fees for a medical exam that is required by your employer. Keep in mind, medical-related expenses may require a minimum amount before they can be considered tax-deductible.
Per day meal costs is another type of expense that is considered tax-deductible. Truck drivers spend their days and nights on the road, which means eating on the go too. As a result, you could spend a substantial amount of money just on meals. That’s why as of October 1, 2018, the IRS has provided a new daily rate of $66 per day standard meal allowance for drivers who travel only in the U.S.
The allowance is higher, $71 per day meal allowance if you happen to be traveling outside the U.S. Local drivers, on the other hand, are not allowed to claim the per diem meal cost deduction because they have the ability to eat at home, or bring meals with them.
Fuel and other travel costs to deduct from your taxes
While on the road, you can also claim other common truck expenses such as:
- Routine maintenance
- New tires
The cost of truck maintenance, as well as cleaning, are considered tax-deductible regardless of ownership, whether the truck is leased, owned by the driver, or owned by a company.
If you know how to repair your own truck and do its routine maintenance and cleaning yourself, you can still claim tax deductions for the costs of parts and supplies.
Meanwhile, fuel and fuel card expenses that you paid out-of-pocket, or were not reimbursed by your company, are considered a business expense and are therefore deductible.
Other business expenses are toll booth fees, parking fees, board and lodging, licensing fees, and other travel expenses, which you can all claim as tax-deductible.
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Tax Deductions for Personal Products
The following items can also be deducted so long as they’re used for business purposes:
- Food storage such as coolers
- Specialized clothing/uniform (including the laundry cost)
- Electronic equipment you might need on the road (GPS tracking device, etc.)
Trucker tax deductions: Key takeaways
The above are just some of the business expenses you can claim as deductions whether you’re an employed driver or self-employed driver.
For owner-operators, additional trucker tax deductions are available such as leasing costs, interest costs if the truck is purchased via a loan and insurance premium costs.
As the owner-operator, you can also claim for your truck’s depreciation every year that you own and use the truck.
Truck drivers, whether employed or self-employed, can claim different tax deductions depending on your work situation.
If you’re not sure of what applies to you, reach out to a CPA or tax consultant before filing your income tax, so you know exactly what your taxable income is and how you can take advantage of the tax returns the government is providing you.