Owner-Operator Tax Deductions Every Trucker Should Know

As an owner-operator, you’re not just a driver — you’re running a business on wheels. Like any business owner, you can deduct the ordinary and necessary costs of earning your income. Knowing which expenses count, and keeping the records to prove them, can make a real difference at tax time.

Your truck and trailer

• Fuel — usually your largest expense, unless your carrier covers it. Keep receipts or fuel card statements.
• Repairs and maintenance — oil changes, tires, brakes, washes, parts and shop labor.
• Depreciation — the cost of a tractor or trailer is normally recovered over several years, but Section 179 expensing and bonus depreciation can let you deduct much of it in the year you put it into service. Georgia doesn’t follow every federal depreciation rule, so your state deduction may differ.
• Lease payments, if you lease your equipment instead of owning it, or loan interest if you finance it.
• Insurance — primary liability, physical damage, bobtail, cargo and occupational accident coverage.

Road and regulatory costs

• Heavy Highway Vehicle Use Tax (Form 2290) for trucks with a taxable gross weight of 55,000 pounds or more. The tax period runs from July 1 through June 30, and the return is generally due by August 31 for trucks on the road in July.
• IRP registration, permits and licenses, including CDL renewals and DOT medical exams.
• Tolls, scale fees and parking.
• Electronic logging device (ELD) subscriptions, GPS units and dash cams.
• Load board, dispatch and factoring fees.

Per diem for meals

When you’re away from your tax home overnight under the Department of Transportation’s hours-of-service rules, you can deduct meals using the IRS’s special transportation-industry per diem rate instead of saving every receipt. Partial travel days are prorated. And while most businesses can deduct only 50% of meal costs, drivers subject to DOT hours-of-service limits can deduct 80%.

To claim per diem, you need records showing the dates, places and business purpose of your trips. Your ELD logs and trip sheets usually do the job — keep them.

Other business expenses

• Cell phone and internet service (the business-use portion)
• Tools, safety gear and supplies, such as gloves, straps, chains and tarps
• Association dues and trade subscriptions
• Accounting, tax preparation and legal fees
• Bank and card fees on your business accounts

Everyday clothing isn’t deductible, even if you only wear it on the road, but protective gear such as steel-toe boots generally is.

Deductions on your personal return

Some of the biggest savings show up on your Form 1040 rather than your Schedule C:

• Self-employed health insurance premiums for you, your spouse and your dependents, if you aren’t eligible for an employer-subsidized plan
• The deductible half of your self-employment tax
• Retirement contributions to a SEP IRA or Solo 401(k)
• The qualified business income (QBI) deduction, which can let eligible owner-operators deduct up to 20% of their qualified business income

Owner-operator vs. company driver

If you drive as a W-2 employee, the rules are different: unreimbursed employee expenses, including meals on the road, generally aren’t deductible on your federal return. If that’s you, ask your carrier whether it offers an accountable reimbursement plan.

Don’t forget quarterly obligations

Owner-operators don’t have taxes withheld from their settlements, so federal and Georgia estimated tax payments are due in April, June, September and January. If you run under your own authority, you’ll also file quarterly IFTA fuel tax returns, due April 30, July 31, October 31 and January 31.

Records make the deduction

Every deduction above depends on documentation. Keep a separate business bank account, save receipts digitally and reconcile your settlements every month. It’s far easier to claim what you can prove.

Our trucking and transportation team helps owner-operators with bookkeeping, quarterly estimates and year-round tax planning. Book a free consultation to see what you might be missing.