The general test for a business deduction is that the cost is ordinary and necessary for the business. For a trucking business that covers most of what it takes to keep a truck legal and moving. What matters as much as the list is having the records that show each cost was real and business-related.
Costs owner-operators commonly deduct
- Fuel, oil and other operating supplies.
- Repairs, maintenance and tires.
- Insurance: truck, liability, cargo and occupational accident coverage.
- Permits, licenses and registration fees, including IFTA decals and apportioned registration.
- The Heavy Highway Vehicle Use Tax paid with Form 2290, which is generally deductible as a business tax expense.
- Tolls and scale fees.
- Truck lease payments, or the interest on a truck loan plus depreciation on the truck.
- Communication and tracking equipment, such as an ELD, and phone costs for the business.
- Accounting and tax preparation fees.
The meal rule for drivers
Drivers who are subject to Department of Transportation hours-of-service limits can generally deduct 80% of meal costs while away from their tax home overnight, rather than the 50% that applies to most businesses. Many drivers use the IRS standard per diem rate for meals instead of keeping every receipt. The rates and rules are set each year, so check the current IRS guidance or ask us.
Buying a truck
The cost of a truck is usually recovered through depreciation, and in some cases the business can deduct more of it up front. How that works depends on the purchase and on the business’s income, so talk to a preparer before you buy, not after.
What is not deductible
- Personal use of the truck and commuting.
- Fines and penalties.
- Costs you cannot support with a record.