In any business, it’s important to be aware of which expenses are tax deductible and which are not, however, when you are part of the trucking industry, every tax return is unique. Drivers are subject to specific requirements.
Here are some things every driver needs to know:
- You Need a Tax Home – This is not necessarily where you live, but rather the city or general area in which you work. For many drivers, this may be a base or dispatch center. If you are an owner-operator using a residence as a tax home, make sure you help maintain the property while you are on the road.
- Filing Taxes – If you are a driver, you will receive a W-2 form that reports your wages and income. Employers must mail these forms to the employees by the end of January. You will report this income on Form 1040 or 1040A. Owner-operators have a couple different options for reporting income. You may rely on your detailed records. However, if you have worked as an independent contractor for a company, you will receive Form 1099.
- Deductions – The IRS allows for deductions designated as “ordinary and necessary” business expenses. These include but are not limited to: Truck maintenance; Union Dues and Fees; Licensing and regulatory fees and drug testing; Uniform equipment used and paid for out-of-pocket, e.g., GPS units, gloves or boots; Sleeper Berth accoutrements like bedding and alarm clocks – and in some cases even a dog that travels with you that you may use as security; Travel expenses and per diems including hotel stays and meals not reimbursed by your employer.