4 Tax Tips for Professional Truck Drivers
The deadline to file your taxes this year was April 15th. If you missed your deadline, filed for an extension, or filed on time but believe you paid too much, find out what to do next. Taxes as a professional truck driver can be difficult, as you may be operating as an independent contractor (self-employed). Luckily, strategies exist to help you take control over your taxes and even reduce the amount you need to pay for the year. Use this basic advice to improve your tax knowledge as a big rig trucker.
Keep Your Receipts
Filing your taxes is all about knowing what you made and what you spent – and being able to prove your out-of-pocket costs should the Internal Revenue Service (IRS) randomly choose to audit you. Keeping track of all work-related expenses and receipts can give you a strong foundation on which to file your taxes. Your receipts will allow you to enter an accurate amount of deductions when filing, as well as offer proof to the IRS during an audit. Keep all your receipts from the previous year until you file your taxes the next season.
Know Your Tax Deductions
Tax deductions can reduce the amount you owe the federal government at tax time. As a truck driver, your deductions are unique because you live where you work. You generally qualify for a number of deductions, including the following:
- Daily meal allowances
- Overnight hotel costs
- Truck repair and maintenance expenses
- Truck cleaning supplies
- Tools for the job
- Union dues
- Electronics, including your cellphone
- Protective clothing/uniforms
- Transportation expenses
- Office supplies
- Cargo load expenses
- Sleep apnea study or equipment
- Childcare/child tax credit
Think about all the items you had to purchase for work. This can range from laundry soap to wash your uniform to wide load flags for your rig. Anything you use to do your job, clean your truck (inside and out), and live on the road can equal a tax deduction. Note, however, that only things you purchase are valid deductions. You cannot enter a deduction if your employer pays for reimbursements. If you are a local driver, you also cannot deduct your travel expenses.
Maintain a Tax Home
You will only be able to claim some tax deductions as a trucker if you have an official tax home. A tax home is the city where you work, not where you live. As a truck driver, your tax home will most likely be the city where your trucking company has a base or dispatch center. If you are using your own residence as a tax home as an owner-operator, you must contribute to maintaining the property while on the road. Establishing a valid tax home is critical to claim travel expenses, including hotel bills, as a long-haul trucker. Without a tax home, the IRS may disallow thousands of dollars in per diem and hotel expenses.
Use a Professional
Each situation is unique. Go to a professional to file your taxes instead of relying on software. Your job as a truck driver comes with many complex tax considerations. A tax professional can make sure you get the best outcome possible.