Driving a truck for a living is hard work. But delivering the goods that keep America running is such an important part of our economy. Without you being on the roads day and night, our country would grind to a halt faster than most people realize.
If you drive as an independent owner/operator (or if you are the owner of a trucking company), you can benefit from quite a few truck driver tax deductions. Just because your small business has wheels doesn’t mean you shouldn’t enjoy saving money at tax time too!
This post will cover many common tax deductions for truck drivers, tips for better record-keeping, and some legislation in the works that could save you even more on your taxes soon.
Common Truck Driver Tax Deductions
Overview of Tax Deductions
First, let’s cover what tax deductions are and how they differ from tax credits.
According to the IRS, a tax deduction “reduces the amount of a taxpayer’s income that’s subject to tax, generally reducing the amount of tax the individual may have to pay.” Most taxpayers choose to take the standard deduction amount when filing their individual taxes. However, as a small business owner, you can use itemized deductions to reduce your tax burden.
Qualified business expenses (also known as “tax write-offs”) that are “ordinary and necessary” in the day-to-day operations of your business can be used at the end of the year as deductions when you file your taxes.
Tax deductions lower the amount of your income that is subject to tax, while tax credits lower your overall tax liability.
Knowing which tax deductions you qualify for and how to track everything can be tricky, but every deduction you claim helps you keep more of your hard-earned money.
While there are currently no tax credits designed specifically for truck drivers (more on that in a minute), there may still be some that you will be able to take advantage of. Be sure to consult your CPA to make sure you’re getting every tax break available to you.
Most small business owners aren’t aware of how many expenses can be used to lower their tax bills. The IRS has complete details in their Publication 334 (“Tax Guide For Small Business”), but here’s a partial list that we go into much greater detail on in another post, “16 Small Business Tax Deductions To Really Save You Money”).
- Utilities
- Rent
- Insurance
- Equipment
- Office Supplies
- Phone & Internet
- Software
- Vehicles
- Advertising/Marketing
- Travel
- Interest
- Bad Debt
- Legal & Professional Fees
- and More!
Typical Deductions for Truck Drivers
Truck drivers may operate in very unique circumstances, but they are still small business owners (unless, of course, they’re driving as employees of a company…but this post isn’t for them).
Some of the typical deductions for truck drivers include:
- Vehicle expenses – Anytime you fuel up your rig, spend money on regular maintenance, or spend a lot more money on repairs, those expenses can save you money on your taxes later.
- Travel expenses – When the highway is your office, many times a hotel is your bedroom. Costs related to meals and lodging that are associated with your time behind the wheel are fully deductible.
- Tools – Chains, tarps, straps, etc. that are commonly used to secure loads or work on your truck are all things that can be deducted.
- Personal products – Unlike other industries, truck drivers are able to deduct what are called “sleeper berth expenses” such as a small refrigerator, GPS, bedding, cleaning supplies, and laundry costs.
- Other necessary expenses – We hope you aren’t driving without insurance or a valid license. (If you are, taxes aren’t going to be your biggest problem!) When you pay insurance premiums, renew your CDL, pay tolls en route to your destination, or get advanced certifications, those expenses are tax deductible too.
Record-Keeping Tips
The key to maximizing any of these deductions is to keep good records. You must be able to back up any deduction claim you make to the IRS.
If you happened to be audited and were unable to validate certain expenses that you used to pay less income tax, you could find yourself facing serious fees and penalties. You may also be subject to additional audits in the future.
The best way to stay out of trouble and avoid tax-time headaches is to save every receipt. Doing this well means developing a system and using it every single time to spend money.
Start by making sure to get a receipt…especially for cash purchases. Then, write notes on them to help you know exactly what the purchase was for. “The cheapest pen is stronger than the mightiest memory.” (Trust us, when April comes around you won’t have a clue what you spent money on last July.) Finally, scan them or take a picture with your phone to create a digital version that is much easier to keep up with. Since you probably won’t have time to do that in the moment, schedule a time each week during your mandatory rest to take care of it.
Check out a post we did on “3 Ways to Manage Receipts and Save Your Business Money” that goes into more detail.
Also, the folks at K&J Trucking Blog have a helpful post highlighting 9 apps to help truckers manage expenses on the road.
Recent Updates and Changes
As we mentioned earlier, there are currently no tax credits specifically designed for truck drivers. However, there are legislative changes in the works to fix that.
U.S. House Bill 2450, the “Strengthening Supply Chains Through Truck Driver Incentives Act of 2023”, was introduced in March of 2023 and is currently scheduled to go before the House Ways and Means Committee.
This bill would allow licensed commercial truck drivers a $7,500 tax credit in a taxable year if passed. According to the specifics of the bill, “the adjusted gross income of such drivers may not exceed $90,000 ($135,000 in the case of a joint tax return and $112,500 for heads of household).”
Additionally, drivers must drive a truck while conducting trade or business for a certain number of hours in a year to qualify.
Another bill, HR 471, called the “Safer Highways and Increased Performance for Interstate Trucking (SHIP IT) Act” was also introduced earlier this year. It also proposes a $7500 tax credit. It is currently being considered by the House Subcommittee on Highways and Transit.
As a CPA firm with several clients in the trucking and transportation industry, we will be sure to stay on top of these developments and let you know if they pass.
Trust a CPA That Knows Trucking Too
Delivering the things that keep our nation running is a tough job. And we are grateful for the equally tough men and women who make it happen.
You deserve every tax break you can get. Knowing which ones you qualify for and how to keep track of everything can be tricky, though.
The last thing you want to worry about when you’re focused on safely getting your load to its destination on time is whether or not your taxes are in order. As a firm with over 40 years of experience helping hard-working small business owners with their finances, we’ve got what it takes to help you keep things in order and your mind on the road.
Schedule a call today to learn more.
