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Tax Deductions for Owner-Operators

Tax Deductions for Owner-Operators

The April 18 deadline for the 2016 tax season is quickly approaching, so as you prepare your taxes for your trucking business, you won’t want to miss out on these deductions and savings. For the average person in 15 percent tax bracket filing jointly for federal, you can get $150 in reductions for every $1000 in deductions, plus appropriate state deductions.

Food Expenses: The per diem for food while traveling is $63, even when drivers spend less. The IRS allows for 80 percent to be deducted ($50.40). If a driver spends an average of six days on the road each week throughout the year, you could get a net deduction of $15,725, saving you from owing the Government more than $2,359 in taxes.

Supplies and Equipment Costs: Supplies and equipment purchased for the business, such as tarps and ratchet straps are deductible. If you figure $50 per week for equipment, 52 weeks per year, you could save as much as $390 to put towards your business.

Personal Vehicle Mileage: Any miles traveled in your personal vehicle related to your business, such as a trip to the store to pick up supplies or driving to the mechanic to drop of a truck, is deductible. Keep records of dates, mileage, destination, and reason for the trip. You can deduct 54 cents per mile, and if you average 25 miles each week, that’s a savings of $105.

Cell Phone Bill: Typically, the full cost of cellphones for drivers is completely deductible. If the phone cost $200, and the monthly expense is $125, that’s a deduction of $1,700, or $255 in savings.

Office Supplies and Devices: Any office supplies or devices purchased for your business, such as furniture and computers/tablets are deductible. Also, any dedicated home office space that is used regularly and only for your business is deductible at $5 per square foot, up to 300 square feet. For example, a 10-foot square spare room in your home used exclusively for work in addition to $800 spent on new office furniture and tablets could earn you a savings of $195.

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