Tax season can be a challenging time for any business owner, and it is no different for those in the trucking business. The good news is that trucking business owners have a variety of deductible expenses to lower their taxable income. Let’s look at some of the most common deductible expenses!
Deductible Expenses
There are several deductible expenses a trucking business may be eligible for. Here are some common ones:
Fuel and Maintenance Costs: You can deduct expenses for fuel, oil changes, repairs, tires, truck washes, and maintenance of your truck.
Insurance: You can deduct the cost of insurance for your truck and business.
Per Diem deductions: You can deduct expenses for meals and lodging while you are on the road. The ability to deduct meals is dependent on whether you drive long distance or locally. You can only deduct meals that are away from your “tax home” or require you to pull over for rest. In other words, local drivers are typically unable to deduct meal expenses. You can also deduct laundry and other incidental expenses while on the road.
Labor: Any labor costs for additional drivers is tax deductible.
Vehicle Expenses: You can deduct expenses related to the cost of purchasing or leasing your truck, including interest on loans and depreciation.
Business Use of Your Home: If you use your home as your primary place of business, you can deduct a portion of your rent or mortgage interest, utilities, and other expenses.
Cell Phone and Internet Expenses: You can deduct expenses for your cell phone and internet services, but only for the portion of time you use them for business purposes.
Truck Accessories: You can deduct expenses for accessories like GPS devices, CB radios, and other equipment that is used primarily for business purposes.
Operational Expenses: You can deduct day-to-day operational expenses such as dispatcher fees, lumper fees, permit fees, tolls, parking fees, and scale weighing fees.
Factoring Fees: If you work with a factoring company, you can deduct the expenses you incur for each transaction/invoice that they manage.
Business Fees: You can deduct regular business expenses such as accounting/legal/consulting fees, licensing fees, association dues, subscriptions like fuel cards or website domain fees, advertising and marketing fees, office supplies, office rent & office utilities, equipment storage fees, or bank charges.
Medical Fees/Clearinghouse Fees: You can deduct any medical fees associated with your business such as receiving your DOT Exam and the fees to maintain the drug and alcohol compliance.
Technology & Software: The expenses for technology and software such as load board or TMS subscriptions are tax deductible.
Tools & Equipment: Any equipment you purchase for your business or truck such as tarps, edge protectors, or straps are tax deductible.
Penalty Fees: If you incur any penalty fees from your customer, such as late delivery fees, you can deduct these as an expense.
Health Insurance: As an owner-operator, you may be eligible to deduct the cost of your health insurance premiums as a business expense.
Retirement Contributions: If you contribute to a qualified retirement plan, such as a SEP IRA or Solo 401(k), you may be able to deduct these contributions as a business expense.
Licenses and Permits: If you need to obtain licenses or permits to operate your trucking business, the cost of these fees may be deductible.
Personal Vehicle Mileage: Any miles driven in your personal vehicle for business purposes such as driving to and from the truck yard, driving to business related meetings, or other work-related travel is tax deductible.
Miscellaneous: Any uniforms, safety gear, client gifts, or charitable contributions for your business can be deducted as a business expense.
It is important to note that you should keep detailed records and receipts to support your deductions, and you may want to consult with a tax professional to ensure you are taking advantage of all the tax write-offs available to you.
Please note that this article is for general information and is NOT tax advise. Please consult with a tax professional.
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The Definitive "All-in-One" Trucking Business Spreadsheet is...well, an all-in-one spreadsheet for your small trucking business! The workbook includes a detailed business dashboard that features key metrics (KPIs) to monitor your business's health such as your average cost per mile, expense and revenue totals, and more. With formulas already built-in, tracking expenses, revenue, trip details, and miles is easy. The spreadsheet also makes IFTA (International Fuel Tax Agreement) quarterly tax reporting easy by calculating your total miles and tax-paid gallons. You will also receive a BONUS Tax Deduction summary report based on your specific operation. This is a turn-key spreadsheet ready for you to use instantly!
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Soshaul Logistics LLC and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. It is meant to serve as a guide and information only and Soshaul Logistics, LLC does not assume responsibility for any omissions, errors, or ambiguity contained herein. Contents may not be relied upon as a substitute for the FMCSA's published regulations. You should consult your own tax, legal and accounting advisors before engaging in any transaction or operation.
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