It’s tax season, which means business owners in the trucking industry have an opportunity to seek tax deductions. Every year, trucking businesses miss out on getting back tax dollars for their company. When it comes time to file your taxes, consult the IRS website and work with a professional tax service to see if you are eligible for deductions. Commercial Truck Trader is sharing 11 common tax deductions for trucking business owners and managers that you may be able to claim based on your unique situation.
How Deductions Are Made for Trucks
As either an owner, owner-operator, or manager, there are a couple of ways that you can deduct the expenses of a truck used for your business when filing your taxes. However, if you use the truck for personal reasons too, those expenses will need to be separate and accurately documented. You want to submit the business expenses to the IRS for your taxes. Some of those expenses include:
- Standard Mileage Rate: the miles traveled in your truck strictly for business. These miles are multiplied with a rate that can change annually.
- Actual Expenses: All of the truck’s expenses added to the total business miles traveled for a complete sum. These expenses include gasoline, truck repairs, oils, insurance, fees, and licenses.
Common Tax Deductions
Unfortunately, while truckers that receive an annual W-2 tax form for their work with a company cannot claim these tax deductions, owners, owner-operators, or managers may be eligible. These deductions could be useful for businesses that rely on the heavy use of a vehicle every day, such as a tractor truck that hauls cargo. Here is a list of categories that often qualify for tax deductions.
1. Depreciating Belongings
You can often claim business assets that depreciate over time, including machinery, equipment, buildings, vehicles, and furniture.
2. Casualty or Theft Losses
If your business assets have been affected by natural disaster or theft losses and are beyond repair, you may receive a deduction. A casualty loss results from damage caused by natural disasters such as a flood, hurricane, tornado, fire, earthquake, or volcanic eruption. A theft loss results from the illegal taking of money or property with the intent to deprive the owner of it.
3. Vehicle Leasing
Leasing vehicles can qualify for deductions, though you will no longer be eligible for the Standard Mileage Rate tax method.
4. Truck Supplies
Truck supplies must be common items that are absolutely necessary for your business. This includes chains, fire extinguishers, tarps, straps, cords, ice scrapers, and tire irons.
5. Office Supplies
Any office supplies that were used out of necessity for running your business may be considered for a deduction. This can include paper, pens, calculators, postage, and faxing or photocopying equipment.
6. Maintenance Repairs
If truck equipment has undergone a maintenance repair which has restored it to working condition, such as overhauling your engine, or had other necessary work done to modify or enhance it, such as installing upfit additions, then you can seek a deduction in the same year the expense was paid. This can include labor costs, as well as oil, tires, and other necessary parts.
7. Personal Equipment or Supplies
Like truck supplies, personal supplies only qualify for tax deductions if they were necessary to business operations, such as uniforms, gloves, and boots.
8. Communication Technology
To improve communication with truck drivers, fleet managers rely on technology, which could be considered for a tax deduction. Citizens Band (CB) radios, electronic logging devices, cellphones, computers, and internet services may be deductible if they’re used exclusively for business.
9. Association Dues
If you’re an owner-operator that belongs to a union or trucking association where you pay fees as a member, then these fees can be deducted if these expenses are used for the benefit of your career or business.
If you paid for your training to earn your commercial driver’s license (CDL), and this certification was used for your business and work, then you can deduct this cost.
Required commercial auto liability, property damage insurance purchased for your truck, or insurance premiums for goods/cargo can be claimed if they’re related to your business expenses.
As a business owner, owner-operator, or manager, always check with the IRS and work with a professional tax consultant to determine the deductions for which your trucking company is eligible. You may find that you could be saving on this year’s taxes. And if you’re looking for your next commercial vehicle, be sure to see new and used commercial trucks available for purchase on CommercialTruckTrader.com!
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 by Commercial Truck Trader or any of its affiliates. You should consult your own tax, legal and accounting advisors before making any decisions regarding your taxes and tax returns/filings.