"Truckers who declare a per diem deduction on their annual income tax filings could find themselves in hot water with the IRS if they rely exclusively on electronic logs retained by the motor carriers."
Jim O'Donnell, President, Trucker Tax Service
Jim O'Donnell, President, Trucker Tax Service
The job of a truck driver is physically demanding, since he has to drive for long stretches. It gets even more taxing for an over the road (OTR) truck driver, since he is continuously driving to transport goods and stays away from his home for quite some time. This is true whether they work for companies or individual agencies. Like all professions, they are also subject to taxation, however, they are also granted some special allowances. While formulating their annual taxes, a majority of them forget that there are certain expenses that are not considered for tax. Go through the following truck driver tax deductions in order to know about the same.
- As already mentioned, truck drivers can be regional and local.
- The deductions in tax vary according to your designation in the trucking industry.
- Some companies pay for your medical exams and uniforms and related expenses. Therefore, there are no deductions there.
- In the companies that do not pay for these, the expenses are deducted.
- An OTR driver will have 2 registered addresses.
- If you live in one state and work in another, stay abreast of how you need to file for your income tax returns.
List of Tax Deductions
- This is the amount you will be spending for creating and updating your license, more accurately termed as 'commercial driver's license' (CDL).
- These costs are totally deductible.
- Also, if you are to complete certain educational formalities to maintain your CDL, these expenses are deducted too.
- These come under 'access' expenses.
- They include the expenses for telephone, data plans, internet connectivity, and even satellite.
- Though these tools are intended for official purposes (as recognized by the IRS), they may be used for personal reasons too.
- While the entire cost of the appliance is deducted, in case of fees, the deduction is 50%.
- Drivers are expected to undergo a thorough medical examination before employment.
- The expenses incurred for the same are deducted.
- They are included under business deductions.
- The tests could include drug test, DOT physical, etc.
- Most truck drivers are affiliated to certain groups or organizations.
- The membership fees for such groups are deductible.
- Even if you are not a member (voluntary association), your dues are deducted, provided you display documents that vouch for your participation and assistance.
- This is a deduction that is principally meant for OTR drivers.
- Whatever expenses they would incur while traveling are deductible.
- It includes transportation and lodging charges.
- Parking costs as well as toll booth expenses are also included.
- Whatever meals the driver will have on his way to the target destination are liable to be deducted.
- This also includes the tips he has paid for.
- If he has his own equipment (coffee maker, tupperware, refrigerator, etc.), these expenses can be deducted too.
- An important point to be taken note of here is the per-diem meal cost.
- This concept means that a stipulated amount is deducted by the IRS for your meals.
- As of 2011, this cost was USD 46.
- Trucks require regular maintenance, like all vehicles.
- All the expenses required to maintain the vehicle are included in this category.
- If the vehicle has broken down and needs repairs, these costs are also included.
- If the drivers pay for the fuel out of their pocket, they can deduct this expense too.
- Any personal expense by the driver qualifies for deduction.
- These include alarm clock, coolers, bedding, first aid, curtains, etc.
- If the driver subscribes to trucking industry magazines, his subscription fees are subject to deduction.
- This is because such magazines contain the latest rules and regulations of the profession.
- These include the ATM fees and credit card fees.
- It also includes the check reorder fees.
- These deductions are for business loan requirements.
- They are subject to certain other conditions, however.
- These come under personal deductions.
- Office supplies include stationary, like books, paper, pens, pencils, binders, stapler, clips, envelopes, folders, punching machine, maps, log books, clipboard, etc.
- Cleaning supplies include paper towels, garbage bags, vacuum cleaner (portable), hand cleaners, window cleaner, sanitizer, etc.
- These come under travel deductions.
- These include costs of posting mails to your employer from wherever you are traveling, period.
- It also includes the costs of mailing invoices, stamps, and other bills.
- These mostly include penalties.
- Mortgage penalties, early withdrawal penalties, etc., are some examples.
- It also includes mortgage interests and real estate taxes.
- Safety gear includes cargo straps, boots, hard hat, gloves, safety glasses, rain gear, etc.
- Other equipment are the tools required for maintenance purposes.
- These include electrical tapes, duct tapes, wrenches, lumpers, tires, hammers, flashlights, screwdrivers, binders, truck parts, sponges, batteries, antenna, etc.
- Load equipment also comes under this category, and includes chains, straps, cords, and straps.
- These mostly include the uniform expenses.
- It also includes the expenses of laundry and dry cleaning, which include laundry bag, soap, brush, hangers, iron, etc.
- These are the expenses that the driver makes if his electronic equipment is under repair.
- They include cell phone, charger, GPS systems, laptops, radio, etc.
When filing for your income tax returns, be sure to discuss things with a tax professional. If you have incurred the above expenses, you will be eligible for truck driver tax deductions. Also remember that you have to provide a proof of the expenses, so collect the required documents and file them away neatly.