At Equinox Business Solutions, we’re proud to provide detailed tax services for truckers and other independent contractors. One particular group of people who can benefit from various tax breaks in this area are owner-operators.
What are owner-operators, and what are some of the tax benefits and deductions available to them? Here are the basics you need to know.
A truck owner-operator is defined as someone who leases their own truck, along with their driving services, to a company for various purposes. Individual truckers own their own equipment and drive their own trucks, but do so as independent contractors – often for multiple companies.
Common Deductible Expenses
There are numerous deductible expenses for people in the owner-operator trucking field:
- Home office: If you manage your business from an office in your home, you can deduct size and expenses.
- Depreciating property: Your truck, trailer and even office equipment depreciates over time, and this can be deducted.
- Loans and mortgages: Any interest made on loans related to business in any way can be deducted.
- Casualty financial loss: For any damage due to accidents or weather.
- Satellite radio: As it can be used for weather and traffic information, subscription fees can be deducted.
- ATM and bank fees: For any business-related uses.
- Phone and internet fees: The IRS allows for 50 percent of access fees for these areas to be used as deductions if they’re used for business purposes.
- Gas: As long as you aren’t reimbursed by another business.
- Per diem: This will vary depending on whether you own your own business or work as an independent contractor. In the latter case, you can only deduct what was not reimbursed.
- Retirement and insurance: All contributions for you and your spouse will be deductible.
- Truck lease and maintenance costs: All payments besides the lease down payment will be deductible here.
If you own more than one truck and subcontract someone else to drive another truck, you must give a Form 1099-MISC to each subcontractor for payments totaling $600 or more for the calendar year.
The following areas are not deductible, and might cause the IRS to audit you:
- Street clothing that isn’t part of the uniform required by the company or protective equipment
- Income lost due to deadheading or downtime
- Time spent on personal maintenance or repairs
For more on the deductions owner-operators have available to them, or to learn about any of our accounting or bookkeeping services for truck drivers, speak to the pros at Equinox Business Solutions today.