Retired IRS Agent

Taking advantage of all of Uncle Sam’s deductions so that you can save on your income taxes involves knowing what you can write off as a business expense and keeping track of those expenses throughout the year. A good way to keep track of your expenses is to maintain a diary or day planner and keep all receipts and other documentation.

Here’s a list of some of the business expenses that can be deducted by truck drivers.

• Vehicle and operating expenses: Basically anything you use to run and maintain your rig including fuel, tolls, parking fees, maintenance and repairs, insurance, tires, depreciation of the vehicle or leasing costs, loan interest, car washes, tools for repairs, tarps and straps, cleaning supplies, license fees, floor mats, seat covers, highway-use taxes and excise taxes, cargo losses, first-aid supplies, fire extinguishers, flares, power cords, flashlights, maps, gloves, boots, sunglasses, other safety gear, dry cleaning for qualified uniforms, cameras, TV, refrigerator, Internet access, cab curtains.

• Banking and office expenses: Banking fees, ATM charges, credit-card interest, Com Data, office supplies such as paper, postage, envelopes, staples, home office expenses (if applicable), fax and copy fees, fax machine, journals and magazine subscriptions, cell phone, clipboards, paper and notebooks, association and union dues, folders, etc.

• Travel expenses: Meals for overnight travel or per diem allowances, tips, hotel expenses, other travel expenses such as laundry bags, detergent, pillows, toiletries, towels, shaving kits, showers, coffee maker, cooler, paper towels, bed sheets, alarm clock.

These are some of the expenses that can be deducted on your tax return, but there are many others that a truck driver might incur. As long as the expense is ordinary, necessary and reasonable to the industry it can be claimed as a business expense.

However, if you do not write it down in a diary or day planner and you do not keep a receipt you might lose the deduction. It’s important to note that receipts are not required for items costing $25 or less, for these expenses you only need to write a note in your diary listing the date, what was purchased and the amount paid.

I recommend you open a business account with your bank and obtain a debit or credit card to charge all of your business expenses. This way you will have all your business expenses separated from personal expenditures. You also will have a clear record of your business expenses on your credit-card statement. Also remember that many receipts will fade over time, so make a copy of the receipts that may fade.

Finally, remember that at least 20 percent to 25 percent of your net income should be put aside for federal and state income taxes. As an independent contractor you are responsible for both income and social security (self-employment) taxes, so it is important that you make estimated payments during the year to avoid a large tax bill at the end of the year.