Ed note: Our experts at the Tax Institute answer questions from clients and other tax professionals all day long during tax season. They were the perfect people to turn to for information on a topic that frequently comes up from our clients on Facebook – what tax benefits exist for truckers?
I’m a truck driver. What deductions can I claim?
You can deduct expenses that are ordinary and necessary to the business. Ordinary and necessary depends on factors that vary by occupation, job and the individual taxpayer.
The IRS considers a semi-truck to be a qualified nonpersonal-use vehicle. You must claim your actual expenses for vehicles of this type. So, you can’t use the standard mileage method.
To deduct actual expenses for the truck, your expenses may include:
- Any other legitimate business expense
Other unreimbursed expenses you can deduct include:
- Log books
- Lumper fees
- Cell phone that’s 100% for business use
- License and fees for truck and trailer
- Interest paid on loan for truck and trailer
Your semi-truck should be depreciated over three years for regular tax or over four years for the Alternative Minimum Tax (AMT). Your trailer should be depreciated over five years for regular tax or over six years for AMT. You may use Form 4562 to depreciate this property on your tax return.
If you’re an employee your expenses will be reported on Form 2106 or Form 2106-EZ. On the other hand, if you’re self-employed both your income and expenses will generally be reported on Schedule C of your Form 1040.
Also, if you’re an employee, you can deduct the expenses of traveling away from home. You’re traveling away from home only if both of these are true:
- You’re required to be away from your tax home for substantially longer than a day’s work.
- You need to sleep or rest to meet the demands of your work while away from home.
As a trucker, you’re not considered to be traveling away from home if both of these are true:
- You leave your terminal and return home in the same day.
- You do not need to sleep or rest to meet the demands of your work while away from home.
If you are traveling away from home, and claiming deductions for amounts spent on meals and lodging, you should check with the U.S. General Services Administration for guidelines on per diem amounts. The standard meal and incidental per diem in 2014 was $46 per day, but your city or county may use a higher rate. An employee, or self-employed, truck driver can only deduct their actual lodging expenses, and cannot use the per diem rates for lodging.
Lastly, make sure to look into whether you need to pay the Heavy Highway Vehicle Use Tax, Form 2290.
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