Tax Planning Strategies for Truck Drivers: A Guide to Maximizing Your Refund

Post Date - Feb 3, 2025

As the new year begins, so does tax season—a time when many people have questions about how to prepare, file, and make the most of their deductions. At Ascend, we understand that managing your taxes as a professional driver can be challenging, especially with the unique expenses and situations that come with life on the road. To help you navigate tax season, we’ve compiled a list of tax planning strategies tailored specifically to truck drivers and their needs.

1. Understand the Difference Between Company Drivers and Owner-Operators

Your tax situation will depend largely on whether you’re a company driver or an independent contractor:

• Company Drivers: Due to recent tax law changes, company drivers generally cannot deduct unreimbursed job expenses. However, it's still essential to understand your W-2 income and ensure accurate withholdings.
• Owner-Operators: As a 1099 independent contractor, you're considered self-employed, which means you can deduct a wider range of expenses but will also need to pay self-employment taxes. Consider working with a tax professional to maximize your deductions.

2. Keep Detailed Records of Expenses

As a professional driver, your job often involves significant expenses that may be deductible, such as fuel, maintenance, meals, lodging, and more. The key to claiming these deductions is keeping detailed records. Use a logbook, spreadsheet, or app to track your expenses, and save all receipts for business-related purchases.

If you're an independent contractor, maintaining records of income and expenses is even more critical to ensure accurate reporting.

3. Know Which Deductions You Can Claim

Truck drivers may be eligible for several deductions, including:

• Per Diem Rates: This covers meals and incidental expenses while you're on the road. The IRS has a standard per diem rate for transportation workers, which can save you time when itemizing expenses.
• Travel Expenses: Costs for overnight lodging, parking fees, and tolls are often deductible.
• Uniforms and Work Gear: Expenses for work-related clothing (such as gloves, boots, and safety vests) and their upkeep may qualify as deductions.
• Truck Expenses: Fuel, maintenance, insurance, and depreciation for owner-operators.
• Other Business-Related Expenses: Cell phone bills, GPS devices, and even professional services like tax preparation.

4. Stay Organized Throughout the Year

The best tax strategies begin long before filing season. To avoid scrambling at the last minute, keep your records, receipts, and income statements organized year-round. Consider using digital tools like tax apps or bookkeeping software to streamline the process and save you stress when tax season comes around.

5. Contribute to a Retirement Plan

Contributing to a retirement account, such as an IRA or SEP-IRA (for self-employed drivers), can reduce your taxable income while helping you build a secure future. Many professional drivers overlook this strategy, but it can be a smart way to keep more of your hard-earned money working for you.

6. Be Aware of State-Specific Tax Rules

Truck drivers often travel through multiple states, which can complicate tax filing. Make sure you understand the rules for the state you reside in, especially if you're an owner-operator.

 

7. Plan for Quarterly Taxes (If Self-Employed)

Owner-operators are typically required to make quarterly estimated tax payments to the IRS. Missing these deadlines can result in penalties, so plan ahead and set aside a portion of your income each month to stay on track.

 

8. Stay Updated on Tax Law Changes

Tax laws and regulations change frequently. For example, recent legislation has impacted per diem rates and deductions for transportation workers. Stay informed by consulting trusted resources or working with a tax advisor who keeps up with industry-specific updates.

 

9. Take Advantage of Resources

There are many resources available to truck drivers to help simplify tax season, including:

• Tax preparation services tailored to truckers.
• Financial planning apps for tracking income and expenses.
• Industry organizations that provide tax tips and guidance.
• Meeting with a tax professional

10. Work with a Tax Professional

Filing taxes as a truck driver can be complex. If you’re unsure about deductions, self-employment taxes, or state-specific rules, consider consulting a tax professional who specializes in trucking. They can help ensure accuracy and uncover opportunities for additional savings.

 

If you have questions or need additional resources, reach out to Ascend’s driver support team. We’re committed to supporting our drivers with tips and resources to help you navigate the road ahead. We’re here to help you succeed—not just on the road, but in every aspect of your career.