Truck Driver Tax Prep and Staying Organized
February 3, 2023
It’s that time of year again—and these truck driver tax prep tips will help you get ready.
Ideally, it’s good to start preparing well in advance. But all those hours on the road can leave you with little time to think about the administrative side of your work.
Luckily, you can still get prepared even if you’re behind. The proper approach to tax prep for truckers can help you out financially. Doing everything right will ensure you avoid penalties and maybe even get money back, depending on your expenses and classification.
Understanding Your Trucker Tax Classification
Speaking of classifications, this is a fine place to start for truck driver tax prep.
Your truck driver tax classification may be different than that of others in the industry—it all depends on the type of work you do and the contracts you signed with clients.
W-2 forms are for those drivers that function as employees of companies. These workers typically have part or all of their expenses covered by the company, and may also have their taxes withheld automatically. However, they must still file and report all income.
1099 forms are for self-employed truck drivers. These drivers are responsible for their own expenses, though they may be eligible for write-offs. They’re also responsible for paying their own taxes, which is usually done in quarterly estimated payments to federal and state tax organizations.
Gather Truck Driver Tax Prep Documents
The easiest way to simplify truck driver tax prep is to keep all your important documents together. The income statements mentioned above fall into this category. Truckers may also need to have proof of identification, copies of their license, and registration documents for their trucks.
What Happens if You Don’t Have These Documents?
Truckers know all about timing issues. Just like you can be late for a delivery or a pickup, sometimes your clients may be late getting you your tax forms.
If you’re looking ahead, you can ask them what date you can expect forms, and even request them ahead of time if you want to give yourself leeway in terms of reviewing and submitting everything.
That’s another important point. Especially for self-employed truckers, never assume the information is correct. Keep your own data about important points like:
· Duration of employment
· Hours worked and miles traveled
· Income on a monthly, quarterly, and yearly basis
Some companies also make documents available online, or even enable you to access your work and income information as it is logged. This setup makes it much easier to keep track of your tax data.
Don’t Miss Out on Any Trucker Tax Deductions
Income isn’t the only part of the equation for truck driver taxes. A big part of trucker tax prep is also gathering up all the information about your deductions.
Having receipts and detailed reports about your expenses can enable you to write off certain costs. Doing so can offset the amount of tax you’ll be forced to pay, and it could even allow you to get some money back.
Some common tax deductions for truck drivers include:
· Vehicle costs, including maintenance, repairs, insurance, and registration fees
· The cost of gas, tolls, and parking fees
· The cost of lodging, certain meals, and select supplies for the road
· Fees for state and local licenses, as well as union and trade association dues
· Uniform upkeep and laundry costs
· Leasing costs for substitute trucks or passenger vehicles
· Fees for dispatch services
Some write-offs will also be relative to your employment classification. For example, some truckers may already have their costs covered by their employer, and therefore cannot claim deductions.
Those drivers who are self-employed will also deduct their quarterly estimated payments. Making these on time will greatly reduce your overall tax burden come April.
The Logbook Is a Trucker’s Best Passenger
As you can imagine, trying to think back through all your trips and come up with these expenses would be maddening. It’s not impossible to look back on and calculate, but it becomes much easier to manage when you do it throughout the year as the expenses are logged.
The truck typically requires its own logbook, and a driver may want to use a different space to log food, administrative, and other miscellaneous expenses.
Enlist the Help of Tax Software and Tax Experts
Tax prep for truck drivers has become much easier in recent decades with the advent of digital tax software. These programs are set up to get you on track with taxes by asking just a few simple questions about your occupation, work arrangements, income, and costs.
While you’ll still need to have your income and expense information handy, being able to plug it into a program and have it do the calculations for you is much easier than crunching numbers yourself.
If you’re a person who trusts people more than technology, you could always enlist the help of a personal accountant. It’s best to look for one who specializes in your field. They may know how to get you special deductions and credits based on your income, health, family, or living situation.
Interested in a New Trucking Career? Contact Trans Lines
While we’re not tax experts, we are a trucking company that invests in its drivers. We’ve been freight industry leaders for over a decade now, offering a competitive salary and benefits package along with a culture of employee support.
Interested in shipping with or even driving for us? Contact us today.