Owning a trucking business or being a truck driver is not an easy feat. From getting your commercial driver’s license to your trucking business license to handling vehicle repairs or the long hours on the road, you may spend more money out of your pocket than other professionals. According to http://simplexgroup.net/tax-preparation/, tax season can be a chance to claim tax deductions and recover some of the money back.
Who Is Eligible for Trucking Tax Deductions?
Unfortunately, if you are an employee of a trucking company and get a W-2 at the end of a year, none of your job-related expenses can be tax deducted. On the other hand, if you are a self-employed driver, you can deduct costs related to your work.
The great news is that if you receive one or more 1099 forms, you can use them and your expense and income records to claim trucker tax deductions. For that, you must fill out a Schedule C Form for your expenses and income. It is also recommended to complete Schedule SE to report self-employment taxes, along with your Form 1040 tax return.
Types of Trucking Tax Deductions
As an owner-operator or truck driver, it may come as a surprise to how many aspects of your daily work life are, in fact, eligible for tax deductions. The most common types of truck driver tax deductions are:
Surprisingly, you can deduct property damage insurance, commercial auto liability, and loss of cargo insurance. In fact, any trucking-related insurance will count as a business expense and can be deducted. So, if you pay for health insurance, you can subtract this from your business expenses by using Schedule 1 From 1040 to deduct health, vision, and dental insurance costs for your and your dependents.
Work Clothing, Personal Products, and Meals
That’s right. You can deduct any body and safety gear or clothing you must buy for work. That can include safety goggles, back brace, company-branded clothing, or steel-toed boots. However, your personal clothing will not count. On the other hand, you can deduct your meal expenses if you are away from home and must stop for a rest and a meal.
Meal deductions generally apply to regional or long-haul truck drivers, who can claim up to 50 percent of their meal expenses. But if you are subject to DOT’s hours of service limits, you can claim as much as 80% of meals you bought on the road.
When it comes to personal products, you may be able to deduct expenses for the following items:
- Alarm clock
- Cleaning supplies
Fuel and Travel-Related Costs
You can also deduct fuel and other trucking-related costs, such as parking fees or tolls. If you work long hours and have to spend the night at a hotel, you can also claim hotel costs. But please remember there is no per diem for lodging, so keep all your receipts to claim your expenses successfully.
As truckers must file an International Fuel Tax Agreement report quarterly, you can recover the money back for fuel taxes and costs you pay while on the road.
Truck and Vehicle Expenses
Just think of how expensive it is to keep your truck in excellent condition. Some truck driver expenses, including repair, maintenance, and depreciation, are all eligible for tax deductions. Because your truck is a non-personal-use vehicle, you can deduct all the truck maintenance and repair costs.
In addition, you can claim deductions for association dues, laptops, phones, or tables used exclusively for work, education (the costs of your commercial driving license), office expenses, or trucking-related subscriptions.
What Expenses Are Not Deductible?
There are, however, some expenses that are not deductible, including the following:
- Home phone line
- Your everyday wear clothing
- Travel expenses and meals on your personal trips
- Reimbursed expenses
- Commuting costs between your house and business
Filing self-employment taxes is a complicated task, and unless you are a tax pro, it is best to use a tax expert to guide you step-by-step through your tax filing. By engaging the services of a tax professional, you will have peace of mind that your tax is filled perfectly and paid on time. Moreover, you can get tax deductions without worrying about documentation and paperwork. You need to fill out several tax reports at the end of each year, and it is crucial to understand how to manage your taxes, so your business keeps running.