As one of the backbones of our nation’s supply chain, truck drivers play a vital role in keeping our economy moving. They transport everything from raw materials to finished goods, keeping businesses and consumers connected across the country. Their job is far from easy, and it can be physically and financially demanding. From long hours on the road and vehicle maintenance to lodging and meals, their job can take a toll on their finances. Fortunately, the IRS offers a variety of tax deductions to help offset these expenses come tax season. In this article, we’ll explore some of the most popular trucker tax deductions so you can breathe a little easier come tax time and keep more of your hard-earned money in your pocket.
Am I Eligible to Claim for Truck Driver Tax Deduction if I Am a W-2 Employee?
Unfortunately, truck drivers who work for a company as an employee are no longer eligible to claim business-related expenses on their tax returns. However, truck drivers who are considered self-employed can take advantage of the following tax deductions to lower their tax bills.
If you are an independent contractor or owner-operator trucker, you must use your Form 1099 along with a completed Schedule C to claim these write-offs on your tax return.
Common Trucker Tax Deductions You Can Claim
Here are some standard tax deductions for truckers that will help you save money during tax season.
1. Association Fees
As a self-employed trucker, joining an association or union may be beneficial to your business or career as a truck driver. So long as it’s directly related to your profession, any fees you incur such as membership dues are deductible on your tax return.
2. Licensing Fees
The expenses associated with any training you undergo in order to maintain your Commercial Driver License are tax-deductible. If you pay for other educational training or programs to improve your skills as a trucker, you can also write off the costs for those fees from your taxes.
3. Fuel and Other Travel-Related Expenses
Fuel is probably one of the major expenses of a trucker. Nonetheless, it’s also one of the biggest write offs you can claim on your taxes. Other travel expenses related to operating your truck for business such as parking fees and tolls are also tax-deductible.
4. Per Diem
As a trucker, you may be away from home for days or even weeks from time to time. During this time, you are responsible for paying for your meals and lodging. Fortunately, the IRS allows you to offset these expenses. You can claim per diem expenses for meals and other incidental expenses you incur while on the road. This deduction is based on the standard per diem rates published by the General Services Administration (GSA). The rates vary depending on the location and time of year.
5. Truck Maintenance Expenses
As a truck driver, it’s important to prioritize vehicle maintenance in order to ensure the safe and efficient operation of your truck. Vehicle maintenance and repair expenses are eligible for deductions. This includes changing the oil, tires, batteries, and any mechanical repairs. Please note that the cost of labor for repairing your truck is not deductible.
6. Insurance Premiums
Payments for vehicle-related insurance such as commercial auto liability, property damage insurance, and cargo insurance can be deducted as a business expense. Additionally, you can deduct the cost of health insurance premiums that you pay for yourself, your spouse, and dependents on Schedule 1 of Form 1040 as an adjustment to your gross income.
7. Clothing Expenses
You may claim a deduction on certain types of clothing that are necessary for your job as a trucker. For example, you may need to wear safety gear such as HAZMAT, steel-toed boots, and safety gloves to protect yourself from risks while performing your job. As such, these clothing are eligible for deductions.
8. Medical Expenses
To ensure the public’s and your own safety, truck drivers are required to undergo medical and physical exams regularly. The examination includes physical evaluations, and tests for vision, hearing, blood pressure, and other factors that could affect your ability to operate a truck safely. The costs you incur for these required exams are deductible as business expenses.
9. Tools and Equipment
If you carry tools and equipment that you use for work, you can claim them as tax deductions. Communication devices such as cellphones or CB radios, GPS systems and mapping software, safety equipment like warning triangles and safety cones, and tools like wrenches and hammers are some commonly claimed items for truck drivers.
10. Retirement Plans
You can claim tax deductions for contributions made to certain retirement plans. SEP IRAs and Solo 401(k) plans are popular options for self-employed truckers. These plans allow you to save for retirement while also reducing your taxable income.
What Trucker Expenses You Can’t Deduct?
While there are many tax-deductible expenses for truck drivers, not everything you spend on your job qualifies for deductions. For example, you can’t deduct regular clothing on your return such as t-shirts or jeans even if you wear them at work. The cost of driving between home and business headquarters, as well as any fines you incur for breaking traffic laws are not deductible. In addition, any expenses that are reimbursed by another party can’t be deducted either.
Tax deductions can be a valuable tool for truck drivers like you looking to save money on their taxes. However, we understand that navigating the complex tax code can be a challenge. That’s why seeking the help of a qualified tax professional is highly recommended.
A tax professional, like Peace of Mind Tax Help, can help you identify eligible deductions for truck drivers, optimize your tax situation, and ensure compliance with tax laws and regulations. We can also provide guidance on proper documentation and record-keeping to support deductions, which can be important in the event of a tax audit. Contact us today and get a free tax quote.