Deductions For Truck Drivers
It is very important for truck drivers to maintain accurate and detailed records in order to determine whether certain expenses are tax deductible. A tool utilized by truck drivers for documenting necessary information is a logbook, which keeps a record of dates, times and amounts of deductible travel expenses. Logbooks are required by many employers.
Travel Expenses
Travel expenses are an allowable expense when business takes you away from home. Your tax home (and surrounding vicinity) is generally defined as the one that you use most often, or from which most of your income is derived.
Reimbursements
Reimbursements received from an employer vary in how they are reported, depending on the rate of reimbursement and whether or not your employer has an accountable plan. Employers with accountable plans may reimburse using actual expenses, per diem or high-low methods.
Depreciation
Applicable deductions may include:
- Over-the-road tractor units which are MACRS three-year property and depreciated over four years
- Trailers, MACRS five-year property, and depreciated over six years
- Tractor units and trailers, which qualify for the additional first-year bonus depreciation of 30% or 50% if purchased new and placed in service after September 11, 2001 and before January 1, 2005
- Expensing part of the cost of a truck or trailer in the year of purchase, if elected
Differences between Employed and Self-Employed
Most of the expense considerations apply to truck drivers who are self-employed, and to those who are employees: except lodging expenses must be actual costs. Meal expenses can be either actual costs or the per diem rate. (If cost are expensed using the per diem rate method, that method must be utilized for the entire year.) Costs incurred in operating the truck will be deducted on an actual expense basis. These include fuel, maintenance, repairs, insurance, and lease payments. The standard mileage rate is not allowed in lieu of actual expenses of operating the truck.