Tax Deductions for 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.
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.

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.