Anyone working for a trucking firm that obtains a W-2 form at the end of the year has none of their job-related costs tax-deductible. If you’re a self-employed driver, you can subtract work-related costs on the other side. Experienced tax professionals can provide you with tax preparation.
You should get a 1099-NEC from each client who paid you more than $600 throughout the year as an owner/operator. You’ll need those 1099s, as well as your records of revenue and costs, to fill out Schedule C and report your trucking revenues and costs. To submit self-employment taxes, you may also need to file Schedule SE. Together with your Form 1040 tax return, both of these documents must be filed.
Tax Deductions
Because of tax reform, you may no longer decrease your taxes by deducting unreimbursed work-related costs if you are an employee. Nevertheless, the new, nearly-doubled tax deduction can replace the deductions they used to itemize for several drivers.
Some products that you’re able to deduct usually involve:
● Vehicle costs. You should maintain a log sheet to prove your car costs.
● Logbooks, lumper fees, and cell phone use for business
● Travel expenditures, including housing, food (with restrictions), and washing costs incurred while away from home
● Dues for unions and trade associations
● Licenses and regulatory fees from the state or municipal government
● Excise and occupational taxes at flat rates (for example, heavy highway vehicle use tax)
● Premiums for liability insurance
To deduct travel costs, you must be traveling away from home, which implies that your obligations need you to be away from the general region of your tax residence for a longer period than a usual workday.
You must sleep or relax to fulfill the demands of your job while you are away from family. This rest need cannot be met by just dozing in your vehicle or getting a short bite to eat. You also do not have to remain away from work for an entire day or from nightfall to dawn, as long as your break is long enough for you to receive the essential sleep or relaxation.
Tax Residence
Before deciding if you are going away from your tax residence, you must first determine where it is.
● In most cases, your regular place of business is your tax residence. It makes no difference where you reside.
● Depending on where your business or work is located, the entire city or geographical region is your tax home.
● If you have more than one regular place of business, your principal place of business is your tax residence.
● Because of the nature of your profession, if you do not have a regular or principal place of business, your tax residence may be where you frequently live.
● You are deemed an itinerant if you do not have a permanent place of business or station of duty, and there is no place where you habitually dwell. Your tax residence is wherever you work.
Self-employed truck drivers may deduct up to 80% of their actual expenditures or the special standard lunch allowance amount. The special standard meal allowance is applicable if you work in the transportation sector.
If you opt to utilize the special rate for any trip, you should use it for all travels that year rather than the ordinary standard meal allowance pricing.
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