Tax Tips for 1099 Truck Drivers: Information About Deductions
To succeed as a self-employed trucker, one must put in a lot of effort and attention. 1099 truck drivers are currently managing their businesses in addition to driving a truck!
There are many different things to keep track of, from operating and maintaining the truck to locating employment and maintaining safety on the highway. Although it’s difficult, you do it because you cherish freedom and aren’t scared to put in the effort. You also need to compile and file all of your company’s tax documentation at the end of the year.
However, even independent business owners don’t have to solve every problem by themselves. Get help from professionals on 1099 truck driver taxes now to avoid problems down the road.
How Do Truck Drivers With 1099s File Taxes?
When their company doesn’t handle the majority of their taxes for them, how do truck drivers file their taxes? Tax preparation can seem intimidatingly complex. Especially if you’ve never done it on your own, but once you get the hang of it, it’s not that difficult.
Truck drivers who work as independent contractors and own their enterprises are required to file the appropriate taxes. Each client is required to provide you with an IRS Form 1099, which is the recognized proof of your income.
You must use IRS Form 1040 to report your income. And you must include Schedule C as a detailed account of your business’s revenues and outgoings.
How to Get the Most Tax Breaks as a 1099 Truck Driver
The fact that you can deduct your company expenses from your taxable income is the most crucial fact to understand about independent contractor truck driver taxes. The best way to maximize your savings is to keep track of all of the expenses that can be written off.
Keep track of your costs and the receipts you receive during the year. Do this to claim all the deductions you are entitled to. Keep careful records of everything you do so that you won’t have to look for receipts during tax season.
You do not have to itemize your tax deductions if you are deducting certain business-related expenses. You can claim the standard deduction on your tax return and still go on to claim all eligible business deductions. This is because your personal and business deductions fall under two different categories.
Consult an accountant if you need small business tax advice. To keep track of all the normal expenses you can write off against your pay, you can also request a truck driver expenses worksheet.
Truckers Need to Know About 4 Types of Tax Deductions in 2022
You can write off almost any expense you make for your business when you file your taxes. Some of the most popular and significant 1099 truck driver tax deductions are listed below:
1. Truck Maintenance Costs
You are dependent upon your car as a 1099 trucker. Everything you do to create money depends on it, yet it also represents your biggest expense. When claiming vehicle-related expenses as deductions, don’t exclude any costs.
Although you cannot deduct vehicle expenses at the IRS standard mileage rate, your overall costs will probably be higher than the usual rate nevertheless. These huge truck expenses are all deductible:
- Vehicle insurance and truck maintenance
- Depreciation of vehicles
- Rent or loan interest on the actual truck Fuel Registration
2. Traveling Life
Travel is a common topic of tax deductions for truck drivers who work for themselves. If you drive great distances for a living, you can write off a lot of your living costs, including:
- Accommodation expenses account for 80% of food costs
- And other things acquired while traveling solely for personal purposes
3. Fees and Taxes
You must pay a variety of trucking-related taxes to the IRS to perform your job. As part of the fundamental cost of 1099 trucking, all truck taxes and registration fees are allowable as business expenses:
- Taxes for self-employment
- Training programs and CDL costs
- Any charges for joining or subscribing to professional organizations
4. Additional Business Fees
You may be able to claim some business expenses that are specific to your independent truck driving employment. While others can be similar to those of a typical office or neighborhood shop. Whatever the trivial costs, they shouldn’t be counted toward your final taxable income. Here are a few of the numerous typical deductible company expenses:
- The cost of business-related insurance
- Cost of health insurance
- Medical exams that are required but not covered by insurance
- Tools for the job and cleaning supplies
- Cost of a cell phone used for business
What Expenses Cannot Be Reimbursed by a Truck Driver
Tax write-offs for truck drivers can cover a wide range of expenses. But they don’t cover everything. When utilizing a vehicle for any kind of private travel, you cannot deduct the cost of gasoline or other vehicle-related expenses. When you are still in your immediate region of residence, you cannot deduct the expense of meals.
A regular per diem fee for a hotel when traveling away from home is also not deductible. But you can do so for some lodging-related charges. Only purchases made for company purposes and not routinely for personal use are eligible for deductions.
Truck Drivers’ Common Tax Mistakes
Freelance truckers sometimes overlook legitimate tax deductions while filing their returns. They are unaware of how many legitimate company expenses they can write off against their taxable income.
Waiting until April to start thinking about taxes is the #1 error 1099 truck drivers make. You must keep your tax return in mind during the entire year if you want to simplify your work and reduce your expenses.
This does not require you to work very hard on your taxes all year long. Simply saving your receipts and keeping track of your costs day in and day out is the best thing you can do to get ready for tax season.
Employ a Tax Expert
Having a system expert on your side will save you both time and money. A competent tax advisor can help you through the procedure. And make sure you take advantage of all possible truck driver tax deductions without forgoing any opportunity to save money.
It’s not easy to prepare taxes as a truck driver, and you didn’t choose this line of business to spend your time reading through IRS regulations. Start collaborating with the pros at Your Part Time Accountant to simplify your life. When it comes to 1099 truck drivers’ tax guidance, nobody is better.