It’s that magical season when owner operators gather their paperwork together to file taxes. However, there are a number of tax deductions truckers can claim to lower the amount they have to pay, or even recoup some money for the previous year. Let’s take a look at some of the tax deductions available to owner operators.
Tax Deductions For Travel
Owner operators spend a lot of time on the road, as well as sleeping in motels and catching meals on the go. The IRS allows for deductions on travel expenses, which includes lodging, parking fees, tolls, registration, and inspection fees. Meals can be deducted as well, but only up to half the cost. As always, tax deductions require receipts to support the claims.
Equipment And Vehicles
Whether you own your truck or lease it, you have deductions available. If you purchased your truck in 2017, you can claim the cost. If this is your second year, you can claim a 50 percent bonus deduction. After the second year, you will have to follow a depreciation table. If you are an owner operator who is leasing a truck, the monthly payments can be deducted without calculating depreciation. The IRS has placed a cap of $500,000 on equipment deductions, but equipment is not limited to vehicles. If you use a laptop or mobile phone for business when you’re on the road, those bills can be deducted as well.
For owner operators, regular maintenance makes for a number of tax deductions. The IRS provides tables which can be used to figure out how much to deduct for mileage and gas station fill ups. Truckers can also deduct oil changes, and parts purchased for repairs and maintenance. Keep in mind that the charge for labor is not included in this, but keep the receipts from the garage because they list the cost of the parts used.
We now live in an era where we do not need to spend hours figuring out our taxes. There are many applications and online services which will help figure out your total tax deductions with a few clicks, to ensure you get the biggest return possible, or at least, do not have to pay as much, depending on your earnings. When in doubt, seek out the assistance of a certified accountant or go to one of the many professional tax filing agencies before the deadline this year.