The tax code is notoriously complex. It is written in such a way that the people with the most information and savvy will benefit hugely in the form of major yearly savings. Bankers, lawyers and other professionals tend to have the edge. They make enough money to hire skilled professionals, and they don’t stop until they have milked every advantage they can. While these professionals bend and twist the code for their own benefit, people in other professions shouldn’t just settle for a high tax bill. There are some lines of work where employees can derive significant tax deductions that bring about savings at the end of the year. Truck drivers provide a prime example. Here’s a tax deduction list for truck drivers to consider.
Common truck expenses
Truck drivers can deduct their costs for things like fuel, new tires, routine maintenance, repairs, and the like. You have to make a choice in most cases on whether you want to accept the general mileage-based deduction or whether you want to deduct actual expenses. Your mileage rate may provide greater savings if you have not incurred significant actual expenses on repairs and maintenance during the course of a year.
Cost of safety equipment
Truckers often spend money on things like wide load flags, load straps, load bars and load chains. Strapping and bungee cords can also be expensive. If you happen to spend any money on this safety equipment, you can deduct it from your income in most instances.
The fees and costs of doing business
Licensing fees, parking fees, tolls and road use taxes are common for truckers who are going across the country. Even if your own state does not have significant fees for doing this kind of business, it is likely you will encounter some state where the government will attempt to nickle and dime you. You can deduct these fees from income to reduce your tax liability at the end of the year.
Typical business related expenses
Truckers run businesses just like anyone else. They may incur incorporation fees, accounting and tax preparation fees, worker’s comp insurance costs and even depreciation costs on assets. Many truckers own their own rig. When they do, they can deduct the depreciation of that asset on a yearly basis. For instance, if your truck is worth $200,000 and it has depreciated $10,000 in value for one reason or another, you’ll be able to save that $10,000 on your taxable income.
Electronics and truck supplies
If you have an expense that is necessary and ordinary for the operation of your trucking business, then you will be able to deduct that cost from your taxable income. Examples include things like cleaning supplies, new radios, alarm clocks to allow you to wake up on time, tape, heaters, sleeping bags and even alarm systems. Speak with your accountant or tax professional to get an opinion on whether these things have been purchased for a legitimate business purpose. Chances are you’ll earn a deduction.
There are many more deductions that truckers can take depending on their situation. Marketing and office expenses qualify, and any union dues or professional association dues can be deducted, too. Talking to a professional is best for truckers who are unsure of whether they have maximized their advantage.