Truck Driver Tax Deductions

As a truck driver, you rack up a lot of expenses when driving — from fuel costs to food costs. Truck drivers can use tax season to claim truck driver tax credits and get some of that cash back.

That's why most trucking companies find it more convenient and practical to be part of a Consortium/Third-Party Administrators (C/TPAs) like Labworks USA to manage all, or part, of an employer's DOT drug and alcohol testing program and other DOT or FMCSA compliance needs to make sure unncessary expenses occur. We perform tasks as agreed to by the employer to assist in implementing the drug and alcohol testing program and to help keep the employer compliant with the DOT/FMCSA Drug and Alcohol Testing rules and regulations. We as a DOT Consortium can help you.

Truck drivers who drive for a company can claim a truck driver tax deduction.

If you're an employer of a trucking company, and you receive a W-2 form at the end of the calendar year, unfortunately, none of your employees' job-related expenses are deductible. On the other hand, if you're a self-employed driver, you can deduct expenses associated with your work.

As an owner/operator, you should receive a 1099-NEC at the end of each tax year if any customer paid you more than $600 during the year. With those 1099s and your own records of income, you'll report your trucking income on Schedule C. If you're required to file Schedule SE to report self-employment income, you may also be required to pay self-employment tax. You'll file both of these forms along with your Form 1040 tax return.

Common truck driver tax deductions

Here are some common deductions you may be able to claim.

• Membership fees

Many truck drivers belong to a union or other truck driving association. You can deduct any union dues you pay, even if they're not required for business or help advance your trucking career.

• Cell phone/computer

If you use a phone, tablet, or laptop exclusively for business purposes, you can deduct the full cost of the item and your monthly data or Internet plan. If you use the phone for both business and personal uses, you can only deduct your business portion of your cell phone expenses.

• Clothing

Even if you only wear them at work, you're not allowed to deduct the cost of your clothes. But specialized clothing and equipment required for your job, such as goggles or protective back braces, are tax-deductible.

• Education

Many drivers pay for advanced training to obtain or maintain their CDL licenses or other advanced certifications If you use this education to enhance your skills in your current field or if it's required by your employer, you can deduct the costs.

• Tools and equipment

Any tools or equipment that you use to run your trucking business are tax-deductible, including:

• Chains
• Tarps
• Ratchet straps
• Bungee cords
• Duct tape
• Tire irons
• Insurance

You must carry commercial auto liability and property damages insurance on your truck, but you may also purchase insurance for cargo or lost income due to a business interruption. You can deduct these expenses as business expenses.

You may also need to pay for your own healthcare coverage. It's deductible, but not as business expenditure. Instead, you deduct health, dental, and eye insurance premiums for yourself, your spouse, and any dependent children on Schedule A.

• Meals

If you drive locally, you can deduct your meals. If you drive long-distance, you can deduct your meal expenses if they exceed 50 miles round trip. The first step is determining where your tax home is. Usually, this is your home address or business headquar­ters. You can only deduct expenses while away from your tax residence overnight, or at least for long enough to require a break to sleep or rest. Local drivers cannot deduct their food and drink expenses from their taxes, but long-distance ones can.

You have two options for deducting meals: the actual expense method or the per diem allowance. You can deduct the actual expenses method by keeping track of what you spend for meals, including tips and taxes.

While the IRS allows many industries to deduct 50% off of their meal costs, drivers subject to the DOT’s “Hours of Service” rules can claim 80% of the actual cost of their meals. Hours of Service rules require drivers who have driven a specific number of hours to stop and take a break for an assigned period of hours.

The per diem system is less work. You can deduct a set amount of money per day instead of keeping track of every expense. That amount depends on where and when you're traveling.

• Travel costs

Other travel expenses incurred while you're away from your tax home for an extended period of time are deductible. This can include:

• Hotels or other accommodations
• Tolls
• Parking

Truck drivers are required to report their actual lodging expenses when they're not staying at a hotel. They cannot claim the hotel rate the way they can for meals.

• Medical exams

Many drivers need to get regular medical exams as part of their job. These required exams are deductible business expenditures. Other regular medical expenses such as a doctor or hospital visits and prescriptions are only deductible if you claim them on Schedule A.

On another note, your DOT physical, drug and alcohol tests, and sleep apnea studies can all be deducted.

For your reference, here's a list of DOT Consortium services we offer at Labworks USA with respective rates.

• Subscriptions

If you're a trucker who subscribes to trucking-related magazines, you can deduct the entire cost of your subscriptions.

• Taxes and licenses

You can deduct any expenses associated with running your business, including the tax and license costs associated with operating a heavy highway vehicle. At Labworks USA, we partnered with a tax expert to help out tax filing like the HVUT and more.

• Vehicle expenses

A semi-truck is considered a qualified non-personal use vehicle by the IRS. This means you can include all the actual costs of operating the vehicle, from gas to insurance to maintenance, when calculating your car’s value.

• Depreciation
• Fuel
• Insurance
• Loan interest, if you financed the purchase of your truck and trailer
• Registration
• Maintenance and repairs
• Tires
• Washing

Semi-truck drivers can't use a standard mileage method for deducting their vehicle expenses because they don't qualify as "business" drivers.

What expenses aren't deductible?

There are some common costs associated with driving a truck that isn't deductible, including fuel, maintenance, insurance, and tolls.

• Clothing that's suitable for everyday use
• Commuting costs between your home and your business headquarters
• Home phone line
• Reimbursed expenses
• Personal travel expenses and meals on a business trip

The main factors in determining whether an expense is deductible are whether it's ordinary and reasonable for business purposes and whether you have a written record of the expense.

Keeping records is extremely important, so make sure to keep copies of any receipts and other paperwork to support the expenses you claim on the tax return.

If you are looking for more information about drug and alcohol testing as a truck driver, visit LabWorks USA. Our DOT Consortium's friendly team will be more than happy to discuss any concerns you may have and work with you to ensure you are always fully compliant specially with random DOT drug and alcohol testing pre-employment testing. Moreover, if you need help with FMCSA Clearinghouse registration, we can further support you.