The unique financial demands of being an independent truck driver make managing taxes a bit challenging. For starters, there’s irregular income. While a typical desk job worker can simply know what their annual salary will be and easily estimate their taxes, truckers tend to work in the “feast and famine” conditions, which make income projections difficult. 

Additionally, because of the nature of the trucking industry truck drivers operate in multiple jurisdictions, which all have varying tax laws. On top of that there’s the self-employment taxes, complex deductions and industry-specific tax requirements like IFTA (International Fuel Tax Agreement) and HVUT (Heavy Vehicle Use Tax).

In an effort to protect your bottom line, many truck drivers struggle to maximize deductions while maintaining compliance. Below we will explore four essential tax tips designed to make the process easier and ensure you stay on track financially as an independent truck driver.

Tip 1: Keep Detailed Records of Your Expenses

Independent truck drivers can maximize their tax deductions by keeping detailed records of all business-related expenses.

Key deductible expenses include:

• Fuel, which often represents one of the largest costs of running a truck.
• Maintenance and repairs, such as oil changes and tire replacements.
• Meals and lodging, which can be deducted using per diem rates provided by the IRS.
• Insurance premiums and permit fees that are directly related to the job.
• Office supplies and equipment, like GPS devices, smartphones, and laptops used for business.

Not only is it important for every independent truck driver to keep meticulous and accurate records, but it is critical to keep personal and business finances completely separate. We recommend putting in place a system for record-keeping that you can adhere to consistently every time without exception. 

Keep in mind that the more time that passes between the purchase and the logging of that expense, the higher the likelihood that it will be overlooked. While it’s tempting to wait until the end of the quarter or the end of the month to log expenses, it’s better to log expenses weekly and even better to log them daily. Best practice is to log the expense on the spot.

Pro tip: streamline this process and avoid losing track of receipts by using an expense tracking app!

Tip 2: Deduct Business Loan Interest

If you’ve financed your truck or other business-related equipment, the interest on those loans is often deductible, reducing your taxable income. This deduction can significantly offset the cost of financing business assets.

In some cases this can be a two-fer, a double win. Not only do you get to deduct your business loan interest, but the reduction in taxable income could also lower your tax bracket, further increasing your tax savings.

Usually, lenders are obligated by law to send a 1099 Form to the IRS and you, typically before January 31st, which shows how much loan interest you paid during the previous tax year. Still, it’s a good idea to keep track of your loan agreements and payment records to ensure you claim the correct amount. Be sure to take advantage of this tip—do not leave anything on the table!

Tip 3: Make Quarterly Estimated Tax Payments

As an independent truck driver, you must pay taxes on their income throughout the year to avoid underpayment penalties.

Quarterly estimated tax payments help meet this requirement. These payments are based on projected income and expenses. The easiest way to calculate them is to use the previous year’s tax data as a baseline and adjust for seasonal fluctuations.

Setting aside a percentage of each paycheck for taxes is a practical way to ensure funds are available when quarterly payments are due. We recommend using tax software or professional services to simplify the process and reduce the risk of audits.

Pro tip: the IRS provides tools like Form 1040-ES to help calculate these payments accurately.

Tip 4: Understand Depreciation Rules for Your Truck

Your truck is likely your biggest business asset. Tip 2 leveraged its loan. Now for Tip 4, we recommend leveraging its depreciation over time. Depreciation allows you to allocate the cost of your truck across several years, thereby reducing your taxable income annually.

Different types of business purchases follow different depreciation rules. Some items can be fully deducted in the same year they’re purchased, though this is often subject to a dollar limit. However, assets like vehicles—especially big rigs—are typically depreciated over multiple years using specific IRS-approved methods. The depreciation schedule for these assets depends on factors such as their cost, expected lifespan, and business use. 

For heavy vehicles like semi-trucks, the IRS classifies them under the Modified Accelerated Cost Recovery System (MACRS) with a 5-year recovery period. This means you can depreciate the truck’s cost over five years, with larger deductions in the earlier years.

Alternatively, the Section 179 deduction allows businesses to expense the full purchase cost of qualifying equipment, like semi-trucks, in the year it’s placed in service, up to a specified limit.

For more details, check out our blog post, Section 179: The Heavy Vehicle Tax Deduction You Don’t Want to Miss.

Tip 5: Understand and File Form 2290 for Heavy Vehicle Use Tax

Every independent truck driver operating a semi truck is required to pay the Heavy Vehicle Use Tax (HVUT) annually through Form 2290. Ensuring compliance with HVUT is essential for renewing truck registration and avoiding disruptions to operations.

It is important to understand when and how much you need to pay. Drivers can make the filing process easier by using online services that specialize in Form 2290 submissions, like i2290.com. One of the benefits of i2290 is automatic payment calculations. Just answer a few questions about your vehicle and you’ll have your 2290 filed in moments.

Simplify and streamline your filing with i2290, where you can enjoy the convenience of e-filing your return from anywhere with internet access, saving time and money. Reap the additional benefits of easily accessible digitally maintained records for seven years, filing VIN corrections and weight increase amendments for free, as well as our world-class customer support team who are always happy to help. 

Our software guides you through a brief series of questions about your company and vehicle(s). For a small fee, we automatically calculate your taxes—it’s that simple. i2290 even facilitates the payment of any taxes owed and generates your stamped Schedule 1 within minutes.

Ready for a simpler Form 2290 e-filing process? Create an account with i2290 today!
Special note: This article is for general purposes, and is not intended to provide, and should not be relied on for tax, legal, investment, or accounting advice. The best way to ensure you’re properly filing and paying appropriate taxes is by following IRS regulations and consulting with a tax professional.