This post was last updated on July 22nd, 2016
During your first year on the road as a professional trucker there are many lessons to learn. How to manage you’re down time effectively, how much should you invest into your rig, the subtle way to your driver hygiene can impact your career, how much coffee is toxic, etc…
While those are all important lessons for any road warrior, one that is often overlooked in how you will handle your federal tax deductions.
Planning ahead before the April 18th deadline rolls around can mean a substantial savings for drivers.
Tax deductions for truck drivers does not have to be overly complicated
For 99% of drivers, itemized deductions will lower your tax burden much more than opting for the standard deduction.
As with any other 1099 job, you must keep receipts and dates for any and all purchases you wish to deduct.
The legal definition of what truck drivers can deduct states that any expense that is necessary and ordinary to perform the job and run the business.
What are some of the most overlooked purchases truck drivers could be deducting from their tax bill?
- Association fees
- Atlas & Maps
- Per-Diem Meals ($46 per day)
- Load Securement tools
- Load Chains
- Road Flags
- XM or Sirius radio subscription
- GPS systems
- Medical checkups
- CDL license & certification
- Cell phone
- Air freshners
- ATM charges
- Interior curtains
- First aid kits
- Dry cleaning bills
What About Deducting Your Mileage?
In a perfect world this would ideal, however unlike using your personal car for a sales job your big rig truck in IRS terms is a “qualified nonpersonal use vehicle”. In layman terms, this means your truck is exlcuded from the standard mileage deduction method.
However, there are still many deductions specifically tied to your semi-truck that you can use:
- Truck maintenance
- cleaning charges
Truck Owner Operator Specific Deductions
- Interest payments
- Leasing fees
- Depreciation rates for your semi-truck and trailer
What Deductions Can I Claim?
First, let us make sure you are eligible to claim deductions in the eyes of the IRS.
First and foremost, you must have a permanent location where you get mail and pay utilities. This is your “tax home”.
Don’t make the mistake of thinking you can deduct 100% of business services. The IRS is savvy enough to realize that some of the deductions are going to be split for personal and business use.
For example, internet access is clearly a requirement for staying in communication with your trucking company and dispatch team. It is also going to be used for personal time as well. Therefore, the maximum amount you can get credit for is 50% of the total fee.
If you do not have a cell phone or computer for this type of communication, you are eligible to deduct 100% of the cost for your business.
Another common mistake for new drivers is trying to double dip. By double dip, we mean claiming something as a deduction while your employer has already reimbursed you for the costs. Gas cards are a common way this happens. If your company is giving you a card to use, you are most likely not going to be able to deduct the fuel charges. Now, if you are paying out of pocket and not being reimbursed for the gas, you can deduct all of it as long as the total is over $100.
Our advice is to consult with a tax professional before you get started driving.
A few hours of planning can help ease the burden of taxes at the end of the year and help you maximize your earning potential.