The second most common question I get is regarding what can and cannot be expensed as a Trucker. Business expenses are one of the most contested topics that the tax courts hear on a semi regular basis.
The IRS says this as a blanket statement on what does and does not qualify:
“To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary” – Chapter 1 Publication 535 (https://www.irs.gov/pub/irs-pdf/p535.pdf)
The tests for reasonable and necessary have been the litmus test for what is and is not necessary, but this is not always a hard and fast rule. One great example of this is when Bruce Springsteen stays at the Four Seasons, he can argue that while it might seem like a lavish expense, he actually has to stay there (or at an equivalent hotel) as he needs the additional security. You want to make sure that you can prove a business purpose for your expense and that it is in line with your industry. So don’t try to be creative and write off a new bass boat as a business expense as a trucker. One commonly claimed expense that most drivers try to claim that they shouldn’t is the home office, which you will have to prove is where your conduct the majority of your work for your employer (in most cases this is your truck).
Here is a quick list of some items that are deductible (whether fully or partially depends on the use):
- Cell Phones/ Tablets and Data Plans
- Satellite Radio
- DVD Players/Computers
- Wi-Fi fees
- Berth Bedding
- Specific use clothing (Safety Gear, Coveralls, and Sun Glasses, Etc.)
- Parking Fees
- Tax and Accounting Services (My personal favorite expense)
- Any cookware or appliance used primarily in your truck
- Maintenance or Repairs on your truck (in some cases you have to amortize these)
- All of your fuel and fluids
- Non-Life Insurance (Bobtail, General Liability, Etc.)
- And several more…
If you have questions whether or not an item is deductible, feel free to contact us or comment below and we will help you determine if you can deduct it.
Thanks and Drive Safe,