Truck Drivers and Tax Season
Some of the most important things to keep in mind for every tax season. Save and Share this one!
The Receipts
As operators and drivers, we are every so often told to keep receipt slips and save them for tax season. In today’s blog we want to add a few tips that should also become common knowledge within the industry. So make sure you screen shot the parts that you can share with others or simply send them the link to this blog!
THE SWITCH
Drivers who work for trucking businesses who normally receive a W-2 form could previously make expense deductions on their tax returns. The Write-offs were for items such as mileage and travel expenses. Then the Tax Cuts and Jobs Act eliminated these expenses claimed on W-2 altogether! So basically, the only workaround if you find yourself in this situation is to file as an independent Owner Operator. Income will then be reported through a form known as Form 1099. With this, deductions can be claimed, and tax payments adjusted (Yes, reduced!).
BE CAREFUL
Since a 1099 filing doesn’t automatically deduct your taxes from your paycheck. You will have to make quarterly disbursements (Payments 4 times a year). Accountants generally recommend setting 25 percent of revenue to make sure the payment at the end of the quarter is covered. That’s why many will still stick to the W-2 filing to avoid having to do this extra paperwork.
WRITE-OFFS
And now to everyone’s favorite tax topic: write-offs! Every write-off should be backed by evidence of pay. This is where these receipts you’ve been keeping will come in handy. Here are the most important ones:
Truck Related:
Anything from fuel, maintenance (where we come in!), registration, and even loan interest. Mileage is also an important one, as well as parking fees and tolls. Try an online Cost Per Mile calculator for peace of mind. Here’s one we found with a simple search: CALCULATOR/COST PER MILE
Insurance:
Insurance payment like commercial liability, cargo insurance, and property liability are eligible.
Licenses
This includes permits and even CDL classes you pay for.
Travel
Coffee, tea, food, lodging and laundry…
Union Fees
This also include any union or industry magazine subscriptions.
Supplies
Include anything like GPS units, phones, laptops, and electronics. Also includes paper, pens and so on.
Personal Care!
Yes, don’t forget to add these as well. Everything from bedding to flashlights to coolers are included.
Other than that,
Let’s make sure you keep records for at least 3 years instead of destroying them right after the tax season. (rookie mistake!)
And remember that personal use items do not count as deductions.