As a trucking business owner, you must know the importance of maintaining your finances. Licensing fees, insurance, and fuel costs can add up rather quickly. However, some of these expenses are tax-deductible. Tax deductions are an excellent tool for owner-operators to reduce the tax burden and keep more money in their pocket. When you prepare to file your taxes, take advantage of these tax deductions.
Be aware that tax regulations can change and be different for everyone. Contacting a tax or legal professional to ensure you follow the federal and state regulations is important.
Owner-Operator Tax Deduction List
Travel Expenses
Some travel expenses can be deducted from your taxes, including:
- Lodging
- Parking
- Tolls
- Fuel
Meals
As an owner-operator, you can claim a per diem deduction for food and other incidental costs while on the road for longer than a typical workday. In 2023, the per diem rate in the United States for owner-operators will be $69 per day for every day the driver is away from home. You can deduct 80% of this or $55.20/day. Be sure to keep records of the following.
- Travel dates
- Receipts
- Meal costs
Per diem rates and regulations can change yearly, so staying current on the latest rules and regulations is important.
Maintenance
Maintenance of your truck is an important part of running your business. Therefore, maintenance expenses can be deducted. Below are some examples of deductions
- Repairs
- Oil changes
- Tires
- Labor
- Parts
You may also be able to deduct the cost of maintenance expenses in the year they occurred or depreciate over several years, depending on the type of maintenance. Be sure to consult with a tax professional to see your legal options.
Payments and Equipment
If you lease your truck, you may be able to deduct your lease payment as a business expense. However, if you own your own truck, you can use a tax write-off for the depreciation of your truck. You may also be able to deduct interest paid on the load for your truck and trailer.
Insurance
Any insurance you pay for related to your business can be tax deductible. This can include.
- Bobtail insurance
- Physical damage insurance
- Cargo liability insurance
Also, if you pay for your own health insurance, you can deduct the premium on the IRS Schedule 1 1040 Form.
Business Expenses
Expenses related to your trucking business can be deducted, including a variety of costs needed to operate your business, such as:
- Office supplies (paper, postage, cleaning supplies)
- Trucking-related subscriptions
- Association dues
- Accounting services
- Permits and license fees
Truck Supplies
The following trucking supplies can be deducted as tools or equipment used to run your business:
- Tire chains
- Ice scrapers
- Snow brushes
- Wire cutters
- Bungee cords
Medical Expenses
DOT physicals are required for a truck driver to maintain a commercial driver’s license (CDL). Owner-operators can deduct out-of-pocket expenses for medical exams that are needed for work.
Technology
If you are using any technology for your business, this can be deduced from your taxes. Some technology devices include.
- Electronic Logging Device (ELD)
- CB Radio
- Internet
- Cell Phone
- Tablet
However, only a portion can be deducted if the device is used for personal and business use.
Safety Gear
Another tax write-off for owner-operators is safety gear. Safety gear is necessary for daily operations. Some examples include.
- Gloves
- Steel-toed shoes
- Reflective vests
- Safety glasses
To qualify for the deduction, the items must be used for work such as loading and unloading freight or driving your truck.