A driver of a commercial motor vehicle can work as an independent contractor. But sometimes truck drivers who work as company employees may be mistakenly classified as independent contractors. So they won't be able to receive employee benefits such as overtime payment, proper wages, breaks, and others.
So let's determine what an independent contractor is. An independent contractor can be a person as well as company that has contract to work for another entity, but they aren't classified as an employee. So-called “freelancers" pay their own independent contractor truck driver taxes - Social Security and Medicare taxes. Also independent contractor does not receive some employee benefits and protections, for example health insurance, minimum wage, and work-related expense reimbursement.
Truckers are often owner-operators who have their own business that's why they are considered independent contractors. They don't use the equipment of a company because they have their own. Also they don't work under the authority of any company or person. However, they have their own responsibilities as the purchasing of a truck and its maintenance of their own trucks, taxes, insurance pay, and more.
Some trucking companies prefer to work with independent contractors because their cost differs from the cost of the employees. If a company hires a truck driver it will cost around 30% more than work with an independent contractor because of the additional expenses for truck drivers they must provide.
Truckers have some truck driving expenses and several tax deductions that are offered for drivers’ use. Independent truck drivers have a right to receive most of the company’s truck driver tax deductions. Form 1099-MISC is what we are speaking about. We recommend you to keep copies of expenses to show when you file taxes.
If a client pays more than 600$ during the year, owner-operators will receive a 1099-NEC in the end of the year. You can show your truck driving expenses and trucking income on Schedule C plus to your 1099s. In Schedule SE you need to report your self-employment taxes. These forms must be filed along with your Form 1040 tax return.
Independent contractors can claim a variety of tax deductions such as daily meal allowances, overnight hotel expenses, and others.
This claiming will lower tax liability and help compensate some of the money that independent contractors spend during the year for travel.
Here is the tax deductions for truck drivers list:
Any truck driver needs to take medical examinations for their work, so it can be also deducted. These deductions are not considered as medical expenses but as truck driver business expenses.
Also when you purchase insurance to cover cargo can be also deducted as a business expense.
Your semi-truck is qualified as non-personal-use vehicle. So independent contractors can claim expenses of operating their truck, such as CMV maintenance, oil, fuel, loan interest, insurance, repairs, depreciation and other expenses connected with your truck.
Truck drivers must undergo regular medical exams if they want to continue their work. The costs for these exams can’t be deducted as business expenses. If you show doctor visits and medications on Schedule A, they can be also deductible.
Taxes and licenses that you pay for your business can be deducted, especially such taxes as the cost of maintaining a CDL and the Heavy Highway Vehicle Use Tax.
If you use devices (smartphones or laptops) for work, their tax deductions for truckers will be 100%. It means that you can claim the full cost of this device and its maintenance.
If you also use these devices for your personal purposes, the IRS allows you to deduct only 50% of the cost of access fees.
Also CB radio and its repair, GPS unit, GPS Map Updates are deductible.
You can deduct travel costs when you stay away from home overnight or need rest from long trip. So you have a right to claim deductions for truck drivers for such expenses as staying at hotels and motels, laundry expenses, bedding, parking, cab curtains, coffee maker, first aid supplies and other accommodations.
Clothing that you use for everyday wear can’t be included to truck driver expense list. You can deduct only a specialized uniform and safety gear that you need for your work, such as safety shoes or gloves. If you use laundry soap, boots gloves or safety glasses, you can claim to deductions.
Your personal products like paper towels, trash bags and the like are deductible if you use them for your work.
As a truck driver, you need to buy necessary things for your work, for example, logbook, flashlight, minifridge and cleaning supplies. They can also be truck driver deductions.
Many truckers are required to be part of a union or other trucking groups. So you can deduct the dues needed for membership. Voluntary memberships can be claimed for deduction if you show that the dues helps in your career.
Any truck driver can't deduct costs that you use for your own needs:
The main factor of the deduction for truck drivers is whether these expenses for trucking are needed your business. To claim for deduction you need to keep all copies of receipts and expenses to show the expenses on your tax return.
Additional costs of driving a truck are cargo losses and damage claims but if you include cargo costs in income and pay to those truckers who help you with your job.