The Owner-Operator’s Guide to the One Big Beautiful Bill Act of 2025

What Truck Drivers Need to Know About the New Tax Law

In July 2025, Congress passed the One Big Beautiful Bill Act (OBBBA), a sweeping tax law that locks in major tax cuts from the 2017 Tax Cuts and Jobs Act and introduces new deductions, credits, and savings opportunities. Many of these changes directly impact owner-operators, giving truck drivers new ways to reduce taxes, plan ahead, and keep more money in their pockets.

This guide breaks down the most important parts of the law in clear, driver-friendly language. Whether you’re a first-year owner-operator or a long-time small-fleet owner, here’s what the new bill means for your business.

Key Tax Provisions for Owner-Operators

Qualified Business Income Deduction (QBID) Is Now Permanent

The 20% QBID has officially become a permanent part of the tax code. For owner-operators, this is one of the most valuable deductions available. It allows you to deduct 20% of your net business profit before calculating income tax, lowering your total tax burden significantly.

The OBBBA also increases the income thresholds so more drivers qualify for the full deduction. On top of that, beginning in 2026, a new minimum QBID of $400 applies for anyone with at least $1,000 of business income. Making this deduction permanent is a big win for long-term planning. Whether you’re thinking about leasing on, switching to an S-Corp, or buying a truck in the next few years, you can count on the QBID being part of your tax strategy every year going forward.

Tax Brackets Stay the Same — Permanently

The seven-bracket system introduced in 2017 is here to stay. This offers stability and makes it easier for owner-operators to forecast their future tax situation. Income thresholds will continue adjusting for inflation, which helps prevent drivers from being pushed into higher brackets automatically.

The U.S. tax system is progressive, meaning you pay a specific tax rate only on the income that falls within each bracket — not your entire income. That structure remains unchanged.

Standard Deduction Increases

The standard deduction has been permanently increased across all filing statuses. This gives most owner-operators a larger automatic deduction each year, reducing taxable income without needing to itemize expenses.

However, the personal exemption is permanently eliminated. For many drivers, the combination of a higher standard deduction and an expanded Child Tax Credit offsets that loss. Choosing between itemizing and taking the standard deduction remains an important yearly decision — especially if you own a home, pay high state taxes, or donate substantially to charity.

Temporary Increase to the SALT Deduction

From 2025 through 2029, the State and Local Tax (SALT) deduction cap increases from $10,000 to $40,000 per household. This is extremely helpful for drivers in states with high income or property taxes.

The pass-through entity (PTE) SALT workaround also remains in place, allowing S-Corp and partnership owners to deduct state income taxes at the business level. That’s a major advantage for high-income drivers operating under these structures. The cap returns to $10,000 in 2030.

Higher 1099 Reporting Thresholds

Beginning in 2026:

• 1099-NEC threshold increases from $600 to $2,000

• 1099-K returns to the long-standing $20,000 and 200 transactions threshold

This reduces paperwork for owner-operators, but does not affect your ability to deduct legitimate business expenses. Keep tracking and recording everything.

Equipment Deductions: Huge Opportunities for Owner-Operators

100% Bonus Depreciation Returns Through 2030

One of the most important changes in the entire bill is the return of full bonus depreciation for equipment purchases. Drivers can deduct 100% of the cost of new or used trucks, trailers, and other qualifying business assets in the year they place them into service.

This rule is powerful because:

• It applies to both new and used equipment

• It can create a business loss, which can be carried forward

• It allows large upfront write-offs during major purchase years

For owner-operators, this means that upgrading equipment or expanding into multiple trucks could dramatically reduce your taxable income for several years in a row.

Section 179 Expensing

Section 179 continues to offer flexibility by letting drivers pick specific assets to fully deduct. The cap rises to $2.5 million, with phase-outs starting at 4 million. Section 179 cannot create a loss, but it helps tailor your taxable income more precisely in profitable years.

Most owner-operators use a combination of Section 179 (first) and bonus depreciation (after) to optimize their tax strategy.

New and Expanded Deductions

Per Diem Deduction Is Now Permanent

The per diem deduction for meals and incidental expenses becomes a permanent part of the tax code.

• Official rate: $80 per day

• Owner-operators deduct 80% of that amount

• Deduction equals $64 per full day on the road

This gives drivers reliable, predictable savings every year.

$6,000 Senior Deduction

Drivers age 65 or older can claim a temporary $6,000 “below-the-line” deduction for tax years 2025 through 2028. Because it reduces Adjusted Gross Income directly, it can increase eligibility for other important credits and deductions.

The deduction phases out at higher income levels, but for most senior owner-operators — especially part-time or seasonal drivers — this offers meaningful tax savings for four years straight.

Auto Loan Interest Deduction

From 2025 to 2028, you can deduct up to $10,000 of interest paid on a personal vehicle (not your commercial truck). The vehicle must:

• Be new

• Be purchased after December 31, 2024

• Be assembled in the U.S.

This deduction is above the line and applies whether you itemize or take the standard deduction. High-income earners may be phased out.

Universal Charitable Deduction

Beginning in 2026, taxpayers who take the standard deduction can still claim some charitable giving.

Caps:

• $1,000 for single filers

• $2,000 for married filers

There is a “floor,” meaning that only donations above 0.5% of your AGI count. This gives drivers who don’t itemize a way to support charities while still lowering their tax bill.

Tax Credits for Families and Small Businesses

Child Tax Credit Becomes More Generous

The Child Tax Credit (CTC) now starts at $2,200 per child beginning in 2025. It is permanently indexed for inflation, so it will rise every year.

A refundable portion of $1,700 remains available, meaning qualifying families can receive that amount even if they owe no income tax. This is especially helpful for owner-operator parents whose income may fluctuate year-to-year.

Overtime, and Tip Deductions

Several deductions have been expanded temporarily to support working families. These include:

• A temporary deduction for tip income (for qualifying spouses)

• A temporary deduction for overtime income (with income phase-outs)

Most owner-operators are excluded from overtime and tip deductions, but these provisions may apply to spouses or non-driving employees.

Trump Accounts

A brand-new savings tool allows parents to invest up to $5,000 annually per child, with employers optionally contributing up to 2500. Children born between late 2024 and early 2029 also receive a $1,000 starter credit. These accounts help families set aside long-term savings for education or major life expenses.

Additional Changes Owner-Operators Should Know

• EV and home energy efficiency credits will end earlier than previously scheduled

• Mortgage interest deduction cap remains at $750,000

• Casualty loss rules expand to include state-declared disasters

• Moving expense deduction is permanently eliminated for most taxpayers

These changes affect specific situations, but are worth knowing as part of the bigger tax picture.

What This All Means for Owner-Operators

Most owner-operators will benefit from the new tax law. Between the permanent QBID, expanded standard deduction, more generous Child Tax Credit, bigger equipment write-offs, and new temporary deductions, many drivers will see lower tax bills and more opportunities for planning.

The return of 100% bonus depreciation and the expanded Section 179 limits alone make equipment upgrades far more tax-friendly. Combine that with the new senior deduction, charitable deduction, and family-focused credits, and the OBBBA provides substantial advantages for a wide range of trucking businesses.

However, the law also adds new complexity. The best way to navigate these changes and maximize your tax savings is to work with a trucking tax expert.

ATBS is here to help you understand how these provisions apply to your unique situation — and how you can take full advantage of them each year.