Knowing which deductions are available specifically for the truck driving industry helps owner operators, independent operators, and commercial company drivers save money on their end of the year taxes. These deductions reduce the amount of income the truck driver has to declare for tax purposes.
Overnight Trips
The 2009 tax year allows the commercial truck driver to deduct $52 for each day he or she is away from home. The maximum deduction is for the first 9 months the driver is away. According to the Internal Revenue Service, the driver can deduct 80% of the per diem for 2009.
This amount is deductible whether the driver is an owner operator or a commercial company driver. If any reimbursements are provided the amount must be subtracted from the total deduction.
Estimate of Taxes
At least 20 to 30% of a commercial truck drivers net income should be saved for tax purposes. This means when all of the deductions and expenses are taken out of the income, an additional 20 to 30% should be taken from that amount. Use prior year taxes as a guide to determine how much should be set aside.
Mileage Tax Deductions
In 2009, the mileage for the use of a car was 55 cents if it was used for business, 24 cents if used for medical or relocation purposes and 14 cents when used for charitable services. In 2010, the rate will decrease to 50 cents, 15.5 cents and 14 cents respectively. This is the mileage rate to use for personal vehicles used to carry out the commercial trucking business. For the truck, use actual expenses.
Home Office Deduction for the Trucking Company
If the home office is the principal place business for administering and managing the trucking company, then this may be deducted from the taxes. The home office must be in the main residence and be used regularly for business purposes.
Deadhead Miles
Deadhead miles are not deductible directly. However, the costs to operate the truck for the miles are deductible.
Deductions Commonly Missed
Small ticket items are often overlooked due to the owner operator or company truck driver being disorganized or thinking a small amount won't count. Small amounts add up and when it comes to figuring up Uncle Sam's part, deduct all that is allowed. Getting organized can save the independent driver and the commercial company truck driver a lot of tax money.
- Bank Fees such as ATM fees, check order charges and charges for having a checking account.
- Annual credit card fees and the interest paid to the credit card for business related expenses.
- Association dues.
- ComData/ComCheck Fees
- Computer software support or technical assistance fees
- Cleaning supplies
- Fax and copy charges
- Internet fees required to carry out the business duties
- Office supplies such as pencils, envelops, paper clips, staples, stamps
- Delivery fees
- Industry subscriptions for magazines, journals
- Drivers licensing fees
- Rain gear or other weather related clothing required for the job
- Fees associated with looking for a truck driving job
Reduce Costs
It is hard for the owner operator, independent contractor and commercial truck driver to earn a living and keep the business afloat. Cutting costs in items such as commercial truck insurance, owner operator insurance, and association fees may be necessary. These items are essential to the business but they are usually the easiest to reduce or get a more competitive rate by switching companies.
Reference: PBS Tax.com
tax101
Jennifer Terry - Jennifer Terry has worked to promote self-determination and consumer education for 10 years. She has been writing since 2004 and has been ...
