As an over the road trucker, either an owner-operator or employee of a company, you may have a range of different tax deductions available. Since everyone is different it is important to talk to your accountant or income tax preparer to determine which deductions you can claim. Obviously, owner operators typically have a much greater range of possible deductions, but keeping track of all expenses all year round can really make a difference.
Fees and Dues
Basically anything that you pay as fees that are related to anything that you use as part of your business or employment can be deducted for most truckers. This can include often forgotten fess such as you internet and phone connection. If you use this solely for personal reasons to stay in touch with the family it may not qualify, but if you use your cell phone or internet data plan to keep in touch with your dispatcher or company you may be able to deduct your fees or a percentage of your fees.
Satellite access fees, even if it is for radio stations that keep you awake on the road, may be a possible deduction. If possible use a set account or credit card for these types of expenses for easy accounting at the end of the year.
All types of fees for financial issues while on the road, including ATM fees and bank transfer fees, may be deductible. In addition your association dues, for all organizations, associations and groups related to trucking can be a claimed. The exception to this rule is if the organization indicates that it cannot be used as a tax deduction, which is a factor of the type of organization.
Office Supplies and Doing Business
As an owner/operator you have a range of different options for claiming deductions as a cost of doing business. This can include everything from all the paper clips that you buy to the postage that you pay to send out invoices and paperwork. If you do this online you are already able to claim your internet connection, but you can still keep track of literally anything and everything that you buy for your business.
If you have an office or a property that is associated with your business you may be able to make several different claims. These can include any interest that you pay on a business loan or on a business credit card. In addition, and depending on your specific situation, you may be able to claim all your mortgage interest as well as any penalties that you might have incurred in the past year on your business loan and property.
Keep in mind if your insurance doesn’t cover your costs of going through mandatory DOT physical tests, medical tests or drug tests you may be able to claim these as an income tax deduction. Save all receipts for these types of tests and check in with your accountant.
Clothing and Trucking Stuff
If you, as a driver, are required to pay for or provide your own uniform that can also be used as a deduction in virtually all situations. If you are an owner operator you can usually write off any safety related clothing, including any steel-toe boots or safety or work gloves that you use on the job. What you cannot write off is clothing that can be used for something else. For example, you cannot write off jeans, work shirts or jackets, unless they are specifically branded and used only when you are on the job.
Meals and Costs On The Road
Meals while you are on the road, accommodation and expenses that are specific to being on the road and away from home can all be deducted in most cases. However, it is always important to check with your accountant or tax preparation expert to avoid making claims that are fall into the category of non-deductible.
For owner/operators, claiming the cost of taking a client or a potential client for lunch or a special event may also be a legitimate deduction. Just keep all receipts and be sure to document that it was a business meeting, luncheon or event.
Don’t Deduct Non-Deductibles
To minimize your risk of an audit it is important to always be able to show how any deductions that you claim are related to your costs of doing business. You cannot double dip, meaning your cannot be paid by your employer as well as claiming a deduction. You also cannot claim personal expenses as work deductions, which will result in a red flag on your tax return and a much greater risk of an audit.
Understanding what you can and cannot claim as a deduction is not always as cut and dried as it may initially appear. Working with an accountant or bookkeeper that has experience in tax preparation is important to getting the deductions you deserve while not claiming something that you really can’t.