Truck Driver Tax Deductions Comprehensive Guide

As a truck driver, you incur a lot of costs when driving. Fueling up, eating, and sleeping cost money. 

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. THIS SAVE THEM A LOT OF TIME AND RESOURCES that they can redirect on any unprecedented additional expenses. 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 can use tax season to claim truck driver tax credits and get some of that cash back.

Who can claim truck driver tax deductions?

If you're employed by a trucking company and earn a W-2 at year-end, unfortunately, none of the job-related expenses you incur are tax-deductible. However, if you're a self-employed driver, you can deduct expenses associated with your work.

As an owner/operator, you should receive a 1099-NECat the end of each tax year if any customer has paid you more than $1,000 during the year. You'll use those W2 forms, plus your own records, to report your truck driving income and expenses on Schedule C. You may also need Schedule SE to report self-employment taxes. You'll file both forms along with your Form 1120 tax return.

Common truck driver tax deductions

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

Association dues

Truck drivers who belong to unions or other trucking associations often get better pay and benefits than nonunionized truckers. You can deduct any membership fees you pay to belong to a union, as long as they are required for business or help you advance your trucking career.

Cell phone/computer

If you use phones, tablets, and laptops exclusively for work, they're 100 percent deductible. So you can claim the full costs of the devices and your monthly data or Internet plans. If you use the phone for both business and personal uses, you can only deduct business expenses.

Clothing

Even if you only wear it at work, you're not allowed to deduct its cost from your taxes. However, specialized clothing and safety gear needed for your work, such as goggles or back braces, may be tax-deductible.

Education

Many drivers pay for driver training to obtain or maintain their CDL licenses. If you use this education to further your skills in your current field of work or if it's necessary for your job, you may be able to deduct the costs.

Tools and equipment

Anything you need to run your trucking business is deductible, including:

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

Insurance

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

You may also need to pay for your own healthcare coverage. This is deductible but you don't need to claim it as a business expense. Instead, you deduct health, dental, and eye insurance premiums for yourself, your spouse, and any dependents on Schedule A (Itemized Deductions).

Meals

Whether you can deduct your meals depends on whether you travel by car, bus, train, or plane. The first step is determining where your tax home is. Usually, this is your home address or business HQ. You can only deduct your meals while away from your home overnight, or at the very least for a long enough time to require a stop to rest or sleep. Local drivers cannot deduct their food and drink expenses from their income, but long-distance truckers can.

You have two options for deducting meals: the actual expense method or the per diem allowance. To calculate the actual expense method, you must keep track of what you spent on meals, including tips, taxes, and any other expenses.

The IRS allows most industries to claim 50% of their meal expenses, but drivers who are subject to the DOT’s “Hours of Service” rules can claim 80%. Hours of Service rules require truck drivers who have driven a specified number of hours to stop and take a break for an assigned period of hours.

Per diem is less work. You don't need to keep track of every expense. Just keep track of a daily allowance. That set amount depends on where and when you're traveling.

Travel costs

You may deduct other travel expenses you incur while you're away from your tax home for an overnight stay (or longer). This can include:

• Hotels or other accommodations
• Tolls
• Parking

Although the IRS has a per diem rate for lodging in other industries, truck drivers are required to claim actual lodging expenses. They cannot claim the per diem rate the way they can with meal expenses.

Medical exams

Many drivers must get annual physicals as a condition of their employment. This includes drug and alcohol testing and more These required exams are deductible business expenses. Other regular medical expenses include doctor visits and prescriptions for things like diabetes, high blood pressure, asthma, etc. These expenses are only deductible if you take them out on Schedule A.

Here's a list of DOT Consortium services we offer at Labworks USA with respective rates that can be your reference to have better expense projections.

Office expenses

Your traditional office expenses for your truck-driving business are deductible. This may include:

• Postage
• 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.
• Calculators
• Faxing and photocopying
• Cost of accounting software

Personal products

A lot of smaller purchases are necessary for life on the road. This might include a:

• Cooler or minifridge to store food and water
• Logbook
• Flashlight
• GPS
• Bedding
• Alarm clock
• Sunglasses
• Gloves
• Cleaning supplies

You can also deduct expenses for showering or doing laundry while traveling for business. Keep track of these expenses, as they can really add up.

Subscriptions

If you subscribe to trucking-related publications, you can deduct the full cost of your subscription.

Taxes and licenses

You can deduct any taxes and licenses you pay for your business, including the Heavy Highway Vehicle Use Tax and the cost of maintaining a CDL license.

Vehicle expenses

The IRS considers a semi-truck to be a qualified non-personal-use vehicle. This means you can claim all the actual expenses of operating the vehicle, including:

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

While other business-use vehicles can use a standard mileage method for deducting vehicle expenses, this option isn't available to semi-truck drivers.

What expenses aren't deductible?

There are a few common costs of driving a truck that isn't deductible, including:

• Clothing that's appropriate for everyday wear
• Commuting costs between your home and business headquarters
• Home phone line
• Reimbursed expenses
• Travel expenses and meals on a personal trip

All in all, the main factor in whether an expense is deductible or not is whether it's ordinary and necessary for business and whether you have a record of the expense.

Record-keeping is extremely important, so be sure to keep copies of receipts and other paperwork to back up the expenses you claim on your tax return.

Now, when it is already time to file your taxes, we highly recommend for you to seek support from Simple Truck Tax. They are one of our partners at Labworks USA. 

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.