Self-employment has its perks. You’re essentially your own boss and get to write your own schedule. However, that also means the expenses of running the business are your responsibility and they can quickly eat into your income. Depending on your industry, those expenses can be numerous. According to the U.S. Bureau of Labor Statistics (BLS) and IRS Schedule C data, truck driver expenses are among some of the highest with expenses exceeding, at times, 70-85% of gross revenue.
While most drivers track the big-ticket items such as fuel and maintenance, many smaller, deductible costs slip through the cracks, but there are some hidden truck driver expenses that can reduce taxable income when properly documented and deducted. Though it’s tempting to disregard the smaller costs, they add up; better tracking leads to better deductions, which leads to more take-home pay.
The goal for all businesses is a bigger bottom line. Managing and minimizing expenses helps to maximize profits. Sometimes these expenses are necessary. As the saying goes, “You must spend money to make money.” Calculated risks and capital investment upfront are required for the potential to achieve financial success in a business venture. But some of these expenses can be mitigated or eliminated. Without carefully tracking truck driver expenses, it’s nearly impossible to assess where costs can be cut.
In addition to profitability, expenses impact taxes, making good trucker recordkeeping a critical component for maximizing tax deductions. Since owner operators are self-employed, they are taxed on net profit as opposed to gross income. Thus, bolstering deductions should be the aim. Meticulous tracking can uncover the hidden gems and overlooked costs that can be claimed as legitimate deductions, potentially lowering taxable income and saving thousands.
These are often paid for with cash or on-the-fly and easy to forget about. These are deductible if not reimbursed by the company. Apps and E-ZPass systems can help track these automatically.
These are low-cost items from truck stops that add up over time. Items like soap, razors, and laundry detergent may be deductible if used on the road.
Essential for route planning, logging hours, and communicating with dispatch, phone and internet service is certainly deductible as a necessary business expense.
Disinfectants, paper towels, trash bags, air fresheners and other items necessary for maintaining a clean cab are deductible; these are especially relevant for owner-operators or leased drivers responsible for truck upkeep.
You may not have considered this, but seat cushions, custom mats, dash cams, and bed upgrades, if used solely for the truck and job, may qualify as business expenses.
Gloves, steel-toe boots, reflective vests, safety glasses, especially DOT-required gear is often deductible.
Wrenches, flashlights, straps, tarps along with other tools purchased and used for work on the road are deductible expenses.
Items such as notebooks, binders, pens, mileage logbooks, apps or paid software for bookkeeping and tax filing are necessary for the job and are business expenses.
CDL renewal fees, hazmat endorsements, and ongoing training courses are often overlooked but essential to staying compliant and on the road.
When you opened your first mobile phone billing statement, perhaps you were shocked to find that the bill was larger than expected. Curious to know why, you likely turned to the itemized list and found that the charge for your call, text, and data plan was precisely what it should have been, but that it was followed by a series of state and federal funds, fees, surcharges and taxes.
Paying $.50 for “State 911” may seem insignificant—after all, it’s only $.50! But once you add up all the fees, it becomes significant, especially month after month. This nickel-and-dime method is precisely how we ought to approach our truck driver expenses. A few dollars here and there at a truck stop may seem insignificant, but when you add it all up, especially stop after stop, you could be leaving a significant amount of money on the table.
This underscores the importance of keeping receipts and documentation, whether through bookkeeping apps or spreadsheets. It all adds up and you don’t want to miss out on the greatest potential deductions. If it is daunting to do this on your own, consult a tax professional familiar with the trucking industry for assistance.
Tracking expenses doesn’t have to be overwhelming. Building better habits for tracking starts with organization and once you settle on the method that works best with your personality and preferences, the key is to keep it consistent. Create a checklist of recurring expenses and set a regular review schedule. While using a credit card dedicated strictly to truck driver expenses helps keep personal and business purchases separate, the monthly statements don’t itemize your purchases for tracking purposes.
Leverage tools like accounting software to automate tracking. The longer we wait to log expenses, the more receipts stack up and the more disorganized we can get, leading to a greater chance that we forget to nickel-and-dime. A solid approach is to make sure that all expenses are logged by the end of every day. The absolute best approach is to, whenever possible, log expenses immediately. Leveraging tools like apps makes this easy to do on the go —and as a truck driver, you are always on the go!
As an owner operator, not only are you a hero of the highway, spending a significant amount of time away from home and family delivering goods to countless consumers, you’re simultaneously running a business and managing the administrative side of things while on the road. This is not for the faint of heart
With so many plates spinning, one of the truck driver expenses that can be easily overlooked is the Heavy Vehicle Use Tax paid via Form 2290. At i2290 we specialize in simplifying that process. Since you’re always on the go, we make it easy to do on the go.
Create an account with i2290 today, answer a few questions about yourself and your truck and for a small fee, our software will calculate your taxes for you; within moments you’ll have your stamped Schedule 1, which is necessary to maintain your vehicle registration.
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.
We're confident that your experience with INSTANT 2290 will be the best Form 2290 e-filing you've ever had. If for any reason you are not satisfied, just contact support for a full refund. No questions. No conditions. Create your account to get started!
