Although it may not be your favorite season, tax season shouldn’t make you anxious. Many tax deductions are available this year if you work as a truck driver. These deductions and the three cardinal tax filing rules are listed below.
- Find your Form
- Truck Driver Tax Deductions: Save Money
- File before April 15
The money you spend on travel expenses for business may enhance the amount of money you get in tax refunds. So be careful to record any costs that are related to your job. Maintaining your organization might result in significant tax savings. Always remember to consult a professional if you have any queries or reservations.
The Trucker’s Report compiled this list of dependable experts in trucking. Many tax preparation firms provide a free first consultation that might alleviate your worries. You may also utilize services like Turbotax or H&R Block to simplify filing. Let’s get going.
Step 1: Find your Form
You may no longer deduct expenses linked to your job as a corporate driver from your taxes. The Tax Cuts and Jobs Act changed the tax system a few years ago.
To complete your Schedule C, if you are an owner-operator, you will need the 1099 forms your clients should have supplied you. Here, you should include your earnings and outgoings for the previous year. Maintaining extreme organization is crucial if you decide to become an owner-operator. You may carefully list your job expenses on this form and subtract them from your taxes. You now have money in your pocket!
Step 2: Truck Driver Tax Deductions: Save Money
The excellent stuff is this. It’s crucial to claim tax deductions for business expenses. It lowers your adjusted gross income, which results in lower tax obligations.
This is how it goes: John’s “gross income” as an owner-operator is $75,000 annually. He is entitled to a deduction of $6,500 for license fees and other business costs. John may deduct $6,500 from his gross income since he had spent $6,500 for these costs and wasn’t reimbursed. His “adjusted gross income” (AGI) is now $68,500, and John only pays taxes.
A lower adjusted gross income will result in reduced tax obligations. On your tax forms, you record your gross income and then compute your adjusted gross income; however, only the adjusted gross income is subject to tax.
Find those tax deductions for truck drivers now!
Important Non-Deductible Costs
We’re all for cutting expenditures, but a few typical expenses aren’t. The following cannot be subtracted from a driver’s yearly salary.
- Expenses covered by your employer
- Clothes that can be modified for daily use
- Travel expenses to the corporate headquarters. However, many businesses WILL contribute to travel expenses to the truck yard. Ask your business if you’re unsure.
- home telephone
- Owner-operators CANNOT write off the time spent maintaining their equipment.
- Owner Operators CANNOT deduct the money they would have earned had their mileage been reimbursed. Owner Operators CAN, however, deduct the vehicle’s running costs during that period, including fuel, tolls, and scales.
- Owner-operators ARE NOT ALLOWED to deduct for downtime.
The 9 Deductions to Take into Mind
1. Internet costs and cell phone plans
No motorist who travels for an extended time often avoids using their phone and internet. Fortunately, the IRS concurs. You can deduct 50% of your phone and internet expenses since most drivers use their phones for personal and business activities. You may also write off the price of a new phone or laptop you purchased this year. You may now include the expenses of communication and technology in your taxes!
2. Medical Exams
For a condition relating to your job, did you see a doctor? Subtract the out-of-pocket expenses! In this situation, medical costs are considered business expenditures, even if they are often not tax deductible. It’s good to know that your health is a major concern, especially during tax season.
3. Licensing Fees
You may deduct any fees you spend obtaining and keeping your CDL license.
4. Food on the Road
Long-distance drivers are permitted to deduct meal costs from their taxable income. The IRS is aware of how much time you spend driving and how much money you spend on dining. Drivers can deduct from their yearly salary either a per diem sum (depending on where and when they drive). The other strategy is to save all of your food purchase receipts. You may write off 80% of your annual dining expenses regarding tax time. Because you may dine at home after your route is over, local drivers are not permitted to deduct meal expenditures.
5. Truck Repairs/Maintenance
You may recover any costs incurred for vehicle maintenance or repairs not covered by insurance! Additionally, deductibles are cleaning and maintenance expenses. This may cover cleaning supplies, vehicle components, etc., but NOT the labor cost if you fix the truck yourself.
6. Association Dues
Most truckers are obliged to belong to a union or collective bargaining. Any necessary participation fees are tax deductible. You could still be able to claim the expense even if you participate in numerous trucking organizations. If you can prove that it advances your career or that you regularly participate in the trucking sector, you are eligible to claim this deduction.
7. Personal Products
Personal items are often the modest expenditures (that pileup!) required when traveling. It could also consist of logbooks, a torch, specific clothes, road-worthy electronics (such as GPS), food storage (consider a cooler), specialized gear, and much more. Keep tight tabs on these little costs since they build up to a lot, and you can write them off on your taxes!
8. Fuel & Travel Costs
If you drive your vehicle, you may deduct exactly how many miles you traveled for work. You may also deduct expenses for maintaining your car, such as those mentioned above, and insurance and loan interest.
9. Standard Deductions Not Related to Trucking
Don’t forget about the typical deductions that have nothing to do with your line of business and the unique deductions that apply to truckers. These may include, among other things, items like child tax credits, lifelong learning credits, and child or dependent care.
Step 3. File before April 15
It’s now. You’ve completed the form and added charges. When you submit your paperwork, you’ll know whether you must mail a check or receive a refund. If you file your taxes by April 15, you may do it online or by mail.
So sit back and unwind after that! For another year, your taxes are over!
