The federal income tax filing due date for individuals for the 2020 tax year is automatically extended from April 15, 2021, to May 17, 2021 – giving you an extra month to file your return.
This postponement applies to individual taxpayers, including individuals who pay self-employment tax. According to IRS.gov, the self-employment tax rate is 15.3% (12.4% for social security and 2.9% for Medicare). Truckers who own their rig are considered self-employed by the IRS.
Truckers can deduct quite a few items for their tax return this year. According to Jackson Hewitt tax services, self-employed drivers could be eligible for the new 20% Qualified Business Income (QBI) deduction.
You are always able to write off parking fees and tolls. But did you know you can deduct your standard mileage rate if you are not deducting actual expenses?
Actual expenses include maintenance and repairs, fuel, oil, registration fees, insurance, tires, loan interest, and depreciation if you own your rig. You must keep a logbook to track the actual expenses accrued throughout the year.
If you don’t own your rig, the leasing costs for your truck are deductible. If you own your rig, you can also claim for your truck’s depreciation every year that you own and use the truck.
Cellphone, Internet, and Other Electronics
The IRS understands that truck drivers need a cell phone and wireless internet access while on the road to find freight and navigate, leading to expensive mobile and internet fees.
Drivers can deduct up to 50% of their mobile and internet usage costs as these are used for professional and personal reasons.
Other electronic devices that are deductible:
- Tablet or mobile phone
- Electronic Logging Devices (ELDs)
- GPS systems are also deductible.
Fees and Membership Dues
You may be part of a Union or Trade Association – any dues paid are deductible. Subscriptions to trade publications may also be deductible.
State or local government licenses and regulatory fees can also be written off as business expenses when you file your taxes this year.
Travel Expenses (OTR)
If you’re traveling away from home for work - meaning your duties require you to be away from the general area of your tax home longer than an ordinary workday, and you need to rest to meet the requirements of your work while away from home - you are able to write off expenses you accrue for food, lodging, and other general costs.
The tax home of a driver is usually where you begin and end your trip - even if you live somewhere else. Your tax home may also be the headquarters from where trips are assigned or distributed. If you don’t have a regular place of business and there is no place where you regularly live, you are considered a transient, and your tax home is wherever you work.
Personal Products Used for Business Purposes
If a personal item is necessary for you to do your job, then you may be able to write it off on your tax returns. Some common deductions include:
- Food storage and coolers
- Specialized clothing or uniforms (including the laundry cost)
- Logbooks and binders
Make sure you know which tax form you'll be using: Owner Operators tend to use 1099-MISC while company drivers file using a W-2. Whether you plan to file by the original deadline or are taking advantage of the extension, it's important to keep good records and double - or triple - check your eligible deductions to help support your business.