Owner-Operator Truck Driver Tax Deductions

Updated: 7 days ago

Owner-operators are not just responsible for calculating and paying their own taxes, they’re also responsible for deducting expenses, which can significantly lower their tax burden. Because of this, we often get asked about the common tax deductions that owner-operators can take advantage of. In this article, we will help answer this question by discussing five of the most overlooked owner-operator truck driver tax deductions.


Update: On your 2021 tax return, you can deduct up to $300 of qualifying charitable cash contributions. Even if you don't itemize your deductions, you can take a charitable deduction for cash contributions made before December 31, 2021. This will help lower your adjusted gross income and taxable income translating to tax savings. In 2021, this was adjusted to $300 per taxpayer, so if you are Married Filing Jointly it’s a maximum deduction of $600.


Are you a self-employed truck driver that needs help with your taxes? Click here!


Insurance

Business-related insurance can be deducted as a business expense. This could include cargo insurance, physical damage insurance, bobtail insurance, etc. Health insurance can also be deducted but not as a business expense. It’s deducted in a different part of your return.


Meal Expenses

The Per Diem deduction is a tax deduction that the IRS allows to substantiate ordinary and necessary business meal and incidental expenses paid or incurred while traveling away from home. The current rate (as of October 1, 2021) has been increased to $69 per day in the Continental US.

Owner-Operator Studying Truck Driver Tax Deductions

You may hear the amount of the deduction quoted as $55.20. Prior to 2021, the IRS allowed an 80% deduction, however, temporarily for 2021 and 2022, the Federal Consolidated Appropriations Act of 2021 (FCAA), passed on December 27th, 2020, allows a 100% deduction on Per Diem.


If you are an owner-operator, the rule is simple, you get to claim the tax deduction for each day that you are away from your “tax home”. On the days that you depart and the days that you arrive at home, you must claim a partial day allowance instead of a full day allowance. That is ¾ of the standard allowance. However, you can't claim the deduction if you depart and arrive home on the same day.


Fuel and Travel

Any of the fuel costs that you face on the road along with any of the fuel taxes you have to pay when filing your quarterly IFTA report are tax deductible. You can also claim other fees like tolls and parking if they are incurred while traveling for work.


Truck Supplies

Many of the truck supplies that you need can be deducted, lowering your taxable income. A few examples of the supplies that can be deducted are:

  • Chains

  • Fire Extinguisher

  • Ice Scraper

  • Coffee Pot

  • Atlas

If the supplies are common to your profession and appropriate or helpful in developing or maintaining your business they can be considered tax deductible.


Trucking Business Fees

Any expense that is directly related to your business can be deducted when it comes time to file your taxes. Some of the more common trucking business fees to make sure you remember are:

  • Dispatch Fees

  • Licensing Fees

  • Subscriptions

  • Association dues

  • Educational expenses

Remember, all of these have to do directly with your trucking business. That means subscriptions, associations, or any education that is outside of trucking can’t be deducted.


Medical Expenses

Truck drivers are required to get regular DOT medical fitness exams in order to maintain their CDL. You can deduct the cost of these exams as a business expense. Any medical exams or treatments that are not directly work-related are only deductible as personal expenses, not business, and you can only claim them if you itemize your deductions.


Maintenance

Generally, if a maintenance repair makes the equipment better, restores the equipment back to its normal condition, or modifies the property for a new or different use, then the expense can be depreciated over several years. Maintenance expenses that don’t fall under these categories can be deducted in full in the same year the expense was paid. A few examples of maintenance expenses that can be deducted are:

  • Repairs

  • Parts

  • Labor

  • Oil

  • Tires

  • Tools

A simple rule of thumb when it comes to maintenance expenses is “If you repair stuff, you can deduct it”.


Office Supplies

Office supplies are tangible and traditional items regularly used in offices by businesses or organizations. A few examples of the office supplies that can be deducted are:

  • Calculator

  • Paper

  • Pens

  • Envelopes

  • Stapler

Any office supplies that were used during the year that were needed to help run the business side of your trucking operation can be considered tax deductible.


Personal Supplies

Not all personal supplies are considered tax deductible. In order for personal supplies to be considered tax deductible they have to be ordinary and necessary for operating your business. A few examples of personal supplies that can be deducted are:

  • Uniforms

  • Gloves

  • Motel

  • Boots

  • Showers

This is a broad tax deduction category that you will really have to think about. Keeping in mind the words ‘ordinary’ and ‘necessary’ will make it easier to decide whether or not an item is tax deductible.


Communication

Similar to the previously mentioned truck driver tax deductions, any technology needed for communication in order to run your business can be considered a deductible expense. As a truck driver, there are many methods of communication that you will be able to deduct from your taxes. A few examples of communication that can be deducted are:

  • CB Radio

  • ELD

  • Cell Phone

  • Internet

  • Radio

Keep in mind that these methods of communication need to be used strictly for business. If you use an item for both business and personal use, like your internet, you may have to identify how much you use your internet for business and how much you use it for personal purposes.


Non-Deductible Expenses

Here is a list of some of the common expenses that aren’t tax deductible:

  • Commuting expenses

  • Clothing that isn't part of your uniform

  • Personal cell phone use

  • Personal trips

  • Reimbursed expenses

Make sure you aren’t claiming these examples or any other expenses that aren’t necessary and ordinary for your business.


Want to know more about owner-operator truck driver tax deductions?

Keep in mind that there are many other overlooked tax deductions that truck drivers aren’t aware they can take advantage of. For our complete list of owner-operator truck driver tax deductions, check out our Tax Deductions for Truck Drivers List. If you have any questions, give us a call at 866-920-2827 or visit our website at www.atbs.com.



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