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Tax Deductions: How To Save Money as a Truck Driver and Owner-Operator
It's not easy being a truck driver, but it sure doesn't have to be expensive. Many truckers remain unaware that there are a lot of expenses which can be deducted on your taxes, because they apply to your business. If you take advantage of the tax deductions available to you, you'll be able to put some extra money in your pocket. This is especially true for trucking owner-operators, because more expenses apply, so you can make the most impact on your bottom line.
We know that any personal trips or expenses, personal phone use, or regular non-uniform clothing is not tax deductible. Luckily, a lot of other things can be deductions. Sometimes this list is long and we can easily miss details. Here are some of the most common owner-operator truck driver tax deductions:Vehicle Expenses
An owner-operator's most common deduction can occur in the maintenance and longevity of the vehicle. Your trucking business allows you to deduct more expenses when doing your taxes, because the vehicle is an essential part of running your business, as opposed to just using a car for personal use. When doing your taxes you can deduct costs pertaining to the following when it comes to your truck:
- Maintenance or any repairs (in the taxable year they occur)
- Registration Fees
- Fuel (and fuel taxes)
- Parking or Tolls
- Lease payments
- CCA (Capital Cost Allowance)
Word of advice: You are not limited to just the obvious. You should consider anything that helps you run or maintain your business. Some supplies can also be deductible; including tools used to secure loads, chains, communication devices, ice scrapers or fire extinguishers.
Drivers do have a requirement to get medical exams regularly to maintain their CDL, and these costs can be deduced on your taxes. So long as the expenses have to do with your job, you can claim some deductions. First aid supplies also qualify for a deduction.
Since the sleeper can be a big part of life on the road, it can also make a difference on your taxes. You can claim deduction on items used to set up your sleeper while on the road, including mini fridges, coffee makers, curtains, bedding or food storage containers.
Home Office and Business Expenses
If you are registered as a business, you can use your home as a way to claim further deductions. To qualify, your home has to be the principal place of business or used for business. What you can apply on your tax as deductions are portions of:
- Utility Bills
- Rent (if you are renting)
- Mortgage interest (not payments)
- Property taxes
- Office supplies (pens, envelopes etc.)
Essentially, since you are the owner of a trucking business, you can deduct expenses when it comes to advertising fees, dispatch or licensing fees, and any association dues or educational expenses, so long as they relate to the business. This also means that gloves or any safety wear, will also be a deduction. These items may not be costly at once, but they do add up on your overall tax statement.
Meal or Entertainment Expenses
Truck drivers often overlook the fact that meals or entertainment for the road may be included as a deduction. You can keep meal receipts and a travel log to help add up the cost of meals as part of the deduction. Keep in mind most items are deductible at 80%. If you are a Canadian long hauler, you can claim up to around $69 dollars per day for meal allowance. For U.S. drivers, the Per Diem deduction would apply and tends to be the same amount of $69, as of now.
Keep in mind that claims are allowed for the days away from home, meaning on the road. You can’t claim Per Diem expenses if you come home to sleep that night. Laws and regulations change yearly, so always keep up with new developments when doing your taxes.
You don’t have to be an accountant to take advantage of these common tax deductions. A little bit of good recordkeeping will do the trick! There is a whole tax code dedicated just to truckers. So, even though you might be self-employed, you can still save money. It's important to always keep track of what business costs can be deducted from your income taxes, so that you can take advantage of the deductions you deserve. A truckers life is full of expenses, so minimize a few while you are at it.