Truck Driver Tax Deductions
Company Driver Tax Deductions
by Corinne Gates
Whether you're new to riding the roads or are an experienced veteran, all truck drivers can agree on one thing. They have a lot of expenses that they are not reimbursed for. However, drivers that work for a company and receive a W-2 are technically employees of the company, not independent contractors or businesses that get the full range of truck driver tax deductions. What do company drivers need to know to make sure they are taking advantage of every tax law possible?
The important difference is that rather than receiving a 1099 and reporting expenses on a Schedule C like an owner operator would, company drivers receive W-2s and have to report their expenses on a Schedule A. This limits what they can take because a Schedule C will let expenses be taken dollar for dollar, but a Schedule A is harder to claim expenses through. Schedule A's are the forms that are used to itemize deductions. A taxpayer can only itemize deductions when he has enough expenses to exceed the standard deduction he qualifies for. This is further complicated by the fact that a person's standard deduction is determined by his filing status. Let's clarify this with an example. Say Bob is a single guy without kids and drives truck for a company. He kept all his receipts like he was supposed to and has about $8,000 of expenses. Since Bob is single, that would make his standard deduction a little under $6,000. This means Bob could either choose to take what the government would give him of roughly $6,000 or he could choose to file a Schedule A to prove he actually has more expenses then what the government automatically will give him credit for. As a person's filing status changes from single to head of household or married filing jointly, the standard deduction amounts get higher. This in turn makes it harder to have enough expenses to itemize. However, there are also other items that go on a Schedule A for deductions such as a home mortgage and property taxes so even if the truck driver tax deductions aren't quite enough, there are other ways to find enough deductions.
The key to success in claiming expenses as a company driver is to KEEP RECEIPTS. It doesn't matter how you do it. You can keep an envelope in the glove compartment for them, shove them in your sun visor, or even stash them in your pillow, but make sure you have them. Most people, especially company drivers, do not realize how much money they put into their job. This is especially true for those drivers whose companies reimburse some of their expenses. They often think they don't have enough to qualify but are often surprised at how much money they really did spend once they start adding the amounts together.
The question then becomes what receipts should you keep? The answer is everything that is job related. Obvious ones would be supplies for your truck like oil and tarp straps. Not quite so obvious ones can be things like office supplies and cell phone expenses. A good rule of thumb is if you can connect it in some way to your job, it is worth a shot. At the end of the year, gather all your receipts together and start sorting them into categories. Once it is time to file your taxes, take them to your tax preparer or accountant to be further processed.
For a great spreadsheet to both categorize and total your receipts, print out this PDF file: Tax Deductions Truck Drivers Miss. There are many important deductions that can be taken from it. The first thing company drivers need to consider is do they own the truck and trailer they are using? The answer in almost every case is no. The reason they are considered to be company drivers is because those things are provided by the company. However, just because the company may own the truck does not mean they take care of the expenses associated with it.
For example, does your company give you things like paper towel, trash bags, air fresheners, or any other items to keep your space clean? If the answer is no, then you have things you can claim.
Does your company provide your uniforms? Some companies do and some don't. If they make you purchase them or if you have pay someone to tailor them to fit you, you can take the expense from that.
This is intended as a guide for deductions you may be able to take.
Consult a tax preparer for other deductions you are eligible to take.