Tag Archives: Per Diem Tax Break for Truckers

owner operator tax deductions

Tax Deductions for Owner Operators

General Trucking, Owner Operators,

The end of the year is quickly approaching, and it is time for all business owners to begin prepping for the tax season. owner operator tax deductions
Being self-employed as an owner-operator allows for many expenses to be used as tax deductions. When using expenses for taxable deductions, the Internal Revenue Service (IRS) requires written proof of these expenses.

Providing proof can include a check, receipt, invoice statement, or when documents are unavailable, records in a notebook can be used. When providing proof of expenses, trucking business owners must provide the place, dollar amount, date, and type of cost. It is important to keep these types of costs and proof up-to-date and in an accessible location, making filing for tax-deductions less stressful.

What Expenses are Tax Deductible?

For owner-operators to claim an expense as a tax deduction, the purchase must be necessary as well as ordinary. A necessary cost is something that is used to help make your business successful. An ordinary expense would be accepted and commonly used within your industry. Expenses do not have to be required in your business to use as a deduction. However, when filing, you should separate your work-related expenses into three different categories:

  • Capital Expenses – business start-up costs, business assets, business improvements.
  • Personal Expenses – typically business owners are unable to deduct personal expenses including living or family expenses. However, if something is used partly for your business and partly for personal use, the cost is divided and you can deduct the business portion.
  • Expenses for the cost of goods – the cost of raw materials including freight, storage, direct labor costs, factory overhead.

Tax Deductions for Owner-Operators

Some common tax deductions for truck drivers can include:

  • Daily Meal Allowances
  • Mileage
  • Overnight Hotel Costs
  • Truck Repair – Maintenance Costs
  • Union Dues

Using these expenses as a tax deduction helps owner-operators lower their tax liability which in return enables you to recover some of the costs incurred out of pocket during the year. For more common tax deductions for owner-operator truck drivers read below.

Common Tax Deductions

Office/Admin

  • Accounting Services
  • Calculators
  • Clipboards
  • Computer Supplies
  • Education
  • Envelopes
  • Legal Costs
  • Paper & Pens
  • Photocopies & Faxes
  • Postage, FedEx & TripPak
  • Receipt Book
  • Stapler & Staples
  • Trade Magazines

Communication/Electronics

  • CB Radio, Repairs, Antennas, Cables
  • Cell Phone & Accessories
  • Pager
  • Phone Cards
  • Qualcomm, Satellite, Internet
  • Satellite Radio
  • GPS Units
  • GPS Map Updates

Insurance

  • Bobtail/Liability
  • Cargo Insurance & Claims
  • Disability
  • Dental, Health & Vision
  • Occupational Accident
  • Physical Damage

Permits/Fees

  • Door Signs, Decals & Lettering
  • Fuel & Road Taxes
  • Federal Highway Use Tax (Form 2290)
  • IRP, Licenses & Permits
  • Parking & Scales
  • ATM, Bank and Credit Card Fees
  • Broker Fees
  • Fuel Card Fees
  • Ledger Book
  • Trade Memberships
  • Transaction Fees

Personal

  • CDL Fees
  • Caps, Coats, Shirts (with carrier logo)
  • Drug Testing
  • Eye Exams, Glasses, Sunglasses
  • Laundry Expenses
  • Mileage on personal vehicle
  • Motels
  • Rain Gear
  • Safety Shoes/Boots
  • Uniforms & Alternations
  • Hangers
  • Hard Hat
  • Safety Glasses

Tractor-Trailer– Exterior

  • Chains, Tarps, Bungee Cords
  • Chrome
  • Fuel & Fuel Additives, Filters
  • Coolant & Antifreeze
  • Headache Rack
  • Kingpin Lock & Padlock
  • Load Locks
  • Oil & Lube
  • Power Washer
  • Repairs, Parts & Labor
  • Shop Equipment, Power Cords
  • Tires & Repairs
  • Trailer & Tractor Wash
  • Vacuum
  • Wax
  • Straps
  • Wide Load Flags

Tractor-Trailer– Interior

  • Accessories
  • Air Fresheners
  • Alarm Clock
  • Appliances
  • Atlas & Maps
  • Bedding
  • Bunk Heater
  • Camera
  • CD Player
  • Cleaning Supplies
  • Coffee Pot
  • Coolers
  • Crockpot
  • DVD Player
  • Flashlight
  • Batteries
  • Flyswatter
  • Hoses & Cables
  • Ice Scrapper
  • Luggage
  • Paper Towels
  • Rugs & Floor Mats
  • Seat Covers & Cushions
  • Storage
  • Hand and Power Tools
  • Trash Bags

Being truthful while filing your taxes cannot ensure that the IRS will not audit you. Sometimes being audited is beyond your control. That is why it is essential to keep all work-related expense receipts in a place that is easily accessible. Filing taxes as an owner-operator does not have to cause a headache. If you are organized with all your business expenses, this can lower your chance of being audited by the IRS.