Self-employed truck drivers are entitled to deduct ordinary and necessary business expenses against their business income. Truck drivers working as employees can only claim business expenses as itemized deductions.
Ordinary and Necessary
The IRS says an ordinary business expense is one that's common and accepted in a given industry. The cost of repairing the seats in the cab would be ordinary; re-upholstering them in silk would probably raise eyebrows. To be necessary, the expense doesn't have to be indispensable, just "helpful and appropriate" for your business.
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H&R Block notes that you can write off the costs related to driving and maintaining your vehicle:
- Gas and oil
- Truck driver's license
- Parking and tolls
Keep receipts so that if you're audited, you can prove you've actually spent the money. The IRS recommends keeping tax records three years at a minimum. If the agency suspects you of under-reporting your income by at least 25 percent, it can look back as far as six years.
If you took out a loan to buy the truck, you can deduct the interest on your return. You have to depreciate the purchase price of the truck itself over several years, reflecting its loss of value as it ages.
You also can deduct the cost of buying and cleaning work clothes -- safety gloves, steel-toed boots, uniforms -- provided they're not suitable for off-the-job wear.
Along with the cost of driving, you can also claim other ordinary and necessary expenses for running your business. For example, if you have a cell phone you use 100 percent for business, that cost is deductible. Internet service in your truck is deductible, too. So are everyday expenses such as log books, office supplies and equipment, and postage for mailing invoices or bills of lading. Classes or business magazines you take to improve your skills are considered legitimate deductions.
The Jackson Hewitt Tax Service explains that if you're away from your tax home long enough to need a place to rest or eat, you can deduct lodging and meals. Your tax home is the city or area where your business is based, or the place you keep your legal residence.
You can deduct 100 percent of the cost of lodging away from your tax home. The write-off for meals is 50 percent of the cost, providing the meals aren't extravagant. Alternatively, you can claim a per diem allowance, which varies with your location. You can look up the allowance online for wherever you are.
Employee or Independent
If you're an independent contractor, you deduct expenses on Schedule C, subtracting them from business income. If you're an employee, you can write off unreimbursed expenses as a miscellaneous itemized deduction on Schedule A. You add up all miscellaneous deductions, subtract 2 percent of your adjusted gross income, and write down whatever remains. Any expenses your employer reimburses are nondeductible.