Tax Deductions and Tracking Expenses for Truck Drivers

June 24th, 2022

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You’ll foot the bill on a significant amount of truck driver expenses while on the road. However, the money you spend on the road for work potentially can be written off. There are a number of tax incentives for truck drivers that can save money at tax time if you’re self-employed. To verify your truck driver deductions, you’ll need to keep updated documents throughout the year.

You may be wondering what types of tax deductions a truck driver may claim, and who qualifies. Look closely at your truck driver expenses and credits options; because everyone’s circumstance vary from person to person, you may want to get personalized counsel from a tax professional. We’ll get you prepared for when tax season rolls around again for a great time to take advantage of truck driver tax deductions and reclaim some of that money. Collect your receipts and let’s talk about tax write offs for truck drivers so you can arrange your plans.

Who is Eligible for Truck Driver Tax Deductions?

Starting in 2018, truck driver tax deductions that were available to everyone were mainly moved to types of truckers that are self-employed.

If you’re self-employed: you’ll use your 1099 to claim all truck driver tax deductions. This is the simplest way to report your earnings. Being an owner-operator takes being critically organized so your itemized truck driver expenses are eligible as deductions for truck drivers.

As a W-2 company driver: you do not have these perks anymore based on the recent law passed in 2018. Unfortunately, none of your job-related costs are tax-deductible if you work for a trucking firm and receive a W-2 at the end of the year. On the other hand, this is helpful to fleet owners or trucking firms because they can claim these deductions. Many businesses utilize mileage tracking apps and reimburse employees using the IRS standard mileage rate. It saves time for employees because they don’t have to keep mileage logs themselves, and it’s the simplest approach administratively.

Is There a Tax Credit for Truck Drivers?

Lawmakers are currently looking to help attract more truck drivers to balance the shortage of truck drivers on the road with a bill aimed to establish tax credit for truck drivers. A tax credit is a reduction in the amount of income tax owing on a dollar-for-dollar basis. A tax deduction of the same dollar amount decreases taxable income only by the same dollar amount. In other words, a tax credit lowers an individual’s tax responsibility.

Lawmakers are aiming to follow through with a practical approach to trucker needs, and if passed, this law will keep goods flowing while making sure drivers feel correctly compensated. The Strengthening Supply Chains Through Truck Driver Incentives Act would make a $7,500 tax credit available for the next two years covering certain Class A CDL drivers. There’s also been a built in function that will work for new truck drivers or those enrolled in a trucking apprenticeship to receive coverage with a tax credit as well to boost the trucking industry.

This bill is believed to be what will elevate the profession while being a solid incentive to those drivers look to improve their salary and other truck driver benefits. This multifaceted approach will unlock new avenues for the industry with policies on the side of trucking advancement.

What Expenses Can an Eligible Truck Driver Deduct?

Now that you’ve taken a look at your tax documents and have concluded that you are eligible, lets first look at what business expenses can be noted as deductions for truck drivers. With our list, you may discover items you didn’t know you could claim. Gather your documentation and let’s see what you can claim:

Association Dues

A number of truckers belong to a union or other trucker associations. You can deduct your membership fees or dues if you belong to a union or other transportation organization. Just keep in mind that it must be a group that is directly tied to being or becoming a truck driver in order to qualify.

Licensing Fees

You can deduct the expense of obtaining a business license if your state or local government requires it. You can also have tax deductions for truck drivers handle the cost of your CDL and any additional licenses you need to run your business.

Insurance

You can obtain insurance to cover cargo or lost income due to a business disruption in addition to the commercial auto liability and property damage insurance you’re obliged to have on your truck. These premiums are deductible as a company expense – not under truck driver expenses.

It’s possible that you’ll have to pay for your own health insurance. This is deductible, but only as a personal expense, not as a corporate expense.

Meals

If you drive locally or large distances, you may be able to add meals to your tax deductions for truck drivers. Knowing where your “tax home” is will help you determine what rules apply to you. This is determined by your home address or where your business headquarters is located. When you are away from your tax home on business for long periods of time, this is when you can deduct meals.

Since this policy only applies to drivers who are away from their tax home long enough to need a rest break, you have two options for deducting meals. Either using the expense method or the per diem allowance to keep track of your truck driver expenses. If you choose the route of deducting the actual expense method, you need to keep track of every dollar spent, from total to tax to tip. If you choose the per diem method, you can simple write off the set amount per day. Remember, this will vary by location. Be sure to follow all relevant IRS rules.

Travel

From fuel to hotel accommodations, various travel expenses incurred while away are considered tax deductions for truckers. Other things like tolls and parking fees can also be claimed as long as they’re for of work.

Truck drivers must claim actual lodging expenditures, even though the IRS sets a per diem rate for other industries. Drivers are unable to claim the per diem rate in the same way that they are able to claim meal expenses. Again, keeping all receipts will be very helpful in this case.

Medical Fees

Say you’re required to get physical exams as part of your job. Under the umbrella of tax write offs for truck drivers is the cost of regular medical fitness assessments as a business expense. Medical examinations and treatments that are not directly related to employment are only deductible as personal expenses, not business expenses. You can only claim your truck driver tax write offs if you itemize them, rather than taking the standard deduction.

Truck Maintenance

With a qualified, non-personal-use vehicle, you can deduct 100% of all repair and maintenance expenses. This covers things like getting your tires rotated or having your truck cleaned. While some sectors, like ridesharing,  provide a set mileage deduction, you must deduct your actual costs in the trucking industry.

Business Fees

A lot of miscellaneous yet necessary purchases are made for life on the road. These can also be truck driver tax write offs expenses for simply showering or doing laundry while traveling for business.

Think of these like personal needs to get your job done efficiently. Devices like phones, laptops, GPS or tablets plus data plans will be needed to keep up with business documents or even communication.

You can deduct dispatch fees as a business expense if you pay them for your loads. Simply keep track of them throughout the year. These small items can really add up.

Tools and Equipment

Truck components can also be tax write offs for truckers, including:

  • Bungee cords
  • Chains
  • Duct tape
  • Electrical tape
  • Ratchet straps
  • Tarps
  • Wrenches

The cost of labor, if you fix the truck yourself, may require items that won’t always be apart of your tool kit. Make sure you claim your expenses that are not repaid, so don’t throw away those receipts.

Subscriptions

Do you read any trucking magazines or visit any trucking-related websites? If that’s the case, this applies within deductions for truck drivers with the entire cost of the memberships covered that you possess.

What Expenses Are Not Deductible?

A few common expenses that are often thought of as truck driver deductions but aren’t deductible include:

  • Clothing outside of work uniforms
  • Trips at length from home to the business hub/headquarters
  • Employer reimbursed expenses
  • Travel expenses and meals had while on personal trips
  • Downtime/expenses incurred regarding operating the truck

Overall, whether an item is deductible or not is determined by whether it is regulated and required for company purposes, as well as whether you have a record of the spending. Keep copies of receipts and other paperwork to back up the expenses you claim on your tax return, as record-keeping is critical.

Hale Trailer Can Help You Keep Deductible Tracking Simple

You may know how to hire truck drivers, but making sure they are educated on filing their taxes properly is detrimental to their livelihood. Even as an owner-operator it can be difficult gauging how to file taxes. As one learns the process, hiring a tax professional will be helpful to walk through the step-by-step solutions. However, you’ll still need to know your figures and precisely record everything.

Hale Trailer is focused on simplifying and streamlining your logistics while having the foresight as thought leaders in the trucking industry. Get your fleet organized for a seamless delivery with your clients today. If you visit one of our locations or view our collection online, you will see our wide range of trailers ready to be rented or purchased. See for yourself how we are here to work for you.

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