You’re probably not thinking about 2019 tax season, but it will be here before you know it. Recording Keeping Tips for Truck Drivers to Prepare for Tax Season will help you now to get organized and get all the deductions you’re due on your 2018 taxes. If you get a W2 from your employer, you will file taxes differently from a self-employed truck driver. Self-employed owner operators have the option to deduct most of their business expense but will need to keep good records and receipts.
Business expenses are tax deductible on Schedule C when you file self-employed taxes. Your vehicle expenses, travel expenses, licenses and specialized work equipment are just a few of the expenses that could reduce your tax bill. When you remember to use the standard deductions available to everyone, you could dramatically reduce the amount you owe Uncle Sam. Generally, a good tax software reporting system will have instructions on deductions. You could also read the Schedule C instructions or talk to your tax preparer.
Self-employed truck drivers need a place that is their tax home to claim travel expenses. This is generally the city where your main business is located. Typically, it isn’t where you live, but where you get your assignments. If you get assignments from many different locations, then your residence could be your tax home. However, the IRS will expect you to demonstrate that you help to maintain this property. Without a tax home, you are considered a transient and cannot claim travel expenses like hotel costs and meals.
Your log book is important to tax season, but you should keep in mind that more information may be required. You should also remember to backup your log book, just in case. Store a copy in the cloud, like Google Drive or Dropbox. Don’t rely on a freight company to maintain your records.
Get a system for organizing receipts. Use an app or a filing system. Take time each week to get receipts in order. Don’t just list them by month. Organize them by trip. Highlight specific work expenses if you make a shopping trip for other things. Jot down notes on the receipt about what it pertained to.
Travel expenses only count when you meet the overnight rule. It’s when you cannot complete a trip in a single day. Your meal expenses, laundry, showers, hotel and other costs are deductible when you are traveling. This is why you should organize receipts by trip, rather than month.
Each year, the tax code changes. Check with your accountant about tax deductions each year to make sure you’re not taking additional deductions that aren’t allowed. Stay organized so that you don’t miss out on tax breaks. Self-employed truck drivers are vital to America’s economy. Make sure you make the most of your dollars by staying organized through the year to substantiate your deductions and get the most on your return.