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Tax Deductions Every Owner-Operator Should Know

10 min read

As an owner-operator, you're running a business. And businesses have expenses that reduce taxable income. Knowing which deductions apply to you can save thousands of dollars every year.

Disclaimer: This is general information, not tax advice. Consult a qualified tax professional for your specific situation.

Per Diem Deduction

This is one of the biggest deductions available to truckers. The IRS allows a per diem deduction for meals and incidental expenses while traveling away from home overnight for work.

For truckers subject to DOT hours of service rules, you can deduct 80% of the federal per diem rate (currently $69/day for most of the US, higher in some areas).

Example: 250 nights away from home × $69 × 80% = $13,800 deduction

You must track the days you're away from home. Fifth Wheel can help with this by recording your trip dates.

Fuel

All fuel for business use is deductible. Keep receipts showing the date, location, gallons, and amount. This also supports your IFTA filing.

If you use your truck for any personal driving, you need to track and exclude that portion.

Truck Payment Interest

If you're financing your truck, the interest portion of your payment is deductible. The principal is not (that's handled through depreciation). Your lender should provide an annual statement showing interest paid.

Depreciation

The cost of your truck can be deducted over time through depreciation. You have options:

Section 179: Deduct the full cost in the year of purchase (up to limits)
Bonus depreciation: Additional first-year depreciation
MACRS: Spread depreciation over 3-5 years

The best choice depends on your income and tax situation. A good trucking accountant can advise.

Insurance

All business insurance premiums are deductible:

Liability insurance
Cargo insurance
Physical damage insurance
Bobtail insurance
Occupational accident insurance

Maintenance and Repairs

Everything you spend keeping your truck running:

Oil changes and filters
Tires
Brakes
Engine repairs
Electrical work
Body repairs
Washing and detailing

Permits and Licenses

IRP (International Registration Plan)
IFTA decals
UCR (Unified Carrier Registration)
State permits
Overweight/oversize permits
HazMat endorsement fees

Tolls and Scales

All toll road charges and scale fees for business trips are deductible. Keep receipts or use a transponder that provides statements.

Communication

Cell phone (business use percentage)
Internet/WiFi
GPS subscriptions
ELD service fees
Satellite radio (if used for weather/traffic)

Professional Services

Accountant fees
Legal fees (business-related)
Factoring fees
Dispatch service fees
Business software subscriptions

Equipment and Supplies

Chains and straps
Tarps
Load bars
Tools
Safety equipment (triangles, fire extinguisher, etc.)
Cleaning supplies
Work gloves and safety gear

Association Dues

Membership in trucking associations like OOIDA is deductible as a business expense.

Health Insurance (Self-Employed)

If you're self-employed and pay for your own health insurance, you may be able to deduct the premiums. This is an adjustment to income, not an itemized deduction, so you get it even with the standard deduction.

Home Office

If you have a dedicated space at home for business (scheduling, paperwork, etc.), you may qualify for the home office deduction. You can use the simplified method ($5/square foot up to 300 sq ft) or calculate actual expenses.

Self-Employment Tax

You can deduct half of your self-employment tax when calculating adjusted gross income. This happens automatically when you file, but it's worth knowing about.

Record Keeping Is Everything

Deductions without documentation are just wishes. Keep:

Receipts for all expenses
Trip logs showing dates away from home
Mileage records
Bank and credit card statements

Digital records are fine. The IRS accepts photos of receipts if they're legible and complete.

Common Mistakes

Missing per diem: Many truckers don't claim it or undercount their days
Personal expenses: Deducting personal items as business expenses is fraud
Mixing accounts: Keep business and personal finances separate
Lost receipts: No receipt often means no deduction
Not using a trucking accountant: General accountants miss industry-specific deductions

Summary

Owner-operators have significant tax deductions available. The key is tracking everything throughout the year, not scrambling at tax time.

Use accounting software or an app like Fifth Wheel to categorize expenses as they happen. Work with an accountant who understands trucking. And remember: every dollar in legitimate deductions is money back in your pocket.

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