Tax Deductions for Drivers

Driver

If your job requires you to drive, such as a taxi, bus, or truck, you will receive a Form W-2 from your employer at tax time which will list your income and tax withholdings. If Box 13 is checked Statutory Employee, you'll have to file a Schedule C, Profit and Loss from Business. Statutory employees are often those who work for an agency or on commission

Any drivers who are self-employed also report their income on a Schedule C. Any net income over $400 is subject to self-employment tax, which may require you to make estimated tax payments. Tips are considered taxable, so be sure to include them in your income when filing. Self-employed drivers can receive a Form 1099-MISC instead of a Form W-2.

Unreimbursed job-related expenses can be deducted, and will lower your tax liability. If you are an employee, you deduct these expenses on a Schedule A, miscellaneous itemized deductions. Self-employed drivers use a Schedule C for deductions. Be sure you have all receipts and proof of your expenses to back up your deductions. Drivers can deduct the following expenses:

  • Tolls, parking fees, standard mileage rate, registration fees, insurance, tires, fuel, and other vehicle expenses, including depreciation if you own the vehicle
  • Traveling long distances, such as lodging, laundry, and limited meals
  • Trade and union dues
  • State or local government regulatory fees and licensing
  • Liability insurance
  • Trade magazine subscriptions
  • Excise taxes and flat rate occupational taxes
  • Mandatory uniforms and accessories (such as work gloves or safety shoes) provided they are not acceptable for everyday wear and are required by the company you work for.
  • Leasing or renting costs (such as a trailer rental or cab fee paid to the company for use of their vehicle)
  • Cargo losses

    • If you paid other drivers to assist you, you may be able to deduct the amount. Be aware that if the drivers are your employees you'll be required to pay Medicare and Social Security employment taxes.

    Travel Expense

    Since drivers are often on the road, certain travel expenses may be applicable. If you are away from your determined tax home for longer than the typical workday, such as a long distance driver, you can deduct additional expenses if you keep a log of receipts, time, place, business relation of the expense.

    To determine your tax home, use the following:

  • Is your regular place of business, regardless of where you live.
  • Includes the city and metro area where your work is located.
  • Refers to the main place of business, if you have multiple locations where you do work.
  • Can be your home if you have no regular place of business.
  • If you have no regular home or place of work, you must follow transient tax rules.
  • Can be the location of given assignments, if you are self-employed.

    • Meal Allowance

    In many small localities, driver get a meal allowance of $46 per day, which can be used as a standard deduction when traveling. You don't have to calculate every place you stop. Truck drivers and bus drivers, as well as others in the transportation industry are allotted a special allowance of $59 per day, but if you use this amount you are required to use it for every trip throughout the year.

    Without the allowance, you are only able to deduct 50% of your actual meal expenses. If the meals take place during the Department of Transportation's hour of service limits, the deduction may raise to 80%.