Owner-operator deductions

Know what business-related expenses you can include in your annual tax filings.

THIS ARTICLE IS FROM the 2007 edition of the Partners in Business manual for owner-operators. The next Partners in Business seminar will be during the Mid-America Trucking Show in Louisville, Ky., March 27-29. To order a manual, call (800) 633-5953, Ext. 1135. Visit www.PIBlive.com for more excerpts and program information. The seminars and the manual are brought to you by Overdrive, ATBS, Freightliner Trucks and Castrol.

As an owner-operator, you are self-employed, so any expense related to operating your business is tax-deductible. The Internal Revenue Service requires you to provide written proof of an expense, such as a receipt, cancelled check, settlement statement or bill. When no such document is available, as with use of your personal vehicle, your records in a notebook will suffice. You must provide the date, place, type of expense and the amount.

CATEGORIES
CASUALTY FINANCIAL LOSS. This is from damage such as hail, wind, theft and accidents.

DEPRECIABLE PROPERTY. The types of property that can be depreciated include tractor, trailer, equipment, buildings, computers, fax machine, copy machine and furniture used in business.

ENTERTAINMENT. Only for entertaining business associates. Personal entertainment, such as movies or games, is not deductible even while on the road.

GIFTS. Limited to $25 value for any person.

INSURANCE PREMIUMS. Includes personal insurance, such as health.

HOME OFFICE. The home office must be your principal place of business. You must use it, including its computer and other equipment, regularly and exclusively for your business.

RETIREMENT PLANS. These include Keogh plans for self or spouse, SIMPLEs, Simplified Employee Pensions (SEPs), IRAs and others.

BUSINESS LOANS AND MORTGAGE. Interest paid during the calendar year.

PER DIEM. Covers meals and incidentals at a fixed daily rate when you are away from home overnight. There is no need to save receipts.

START-UP COSTS. Trips to visit truck dealers, bankers, carriers, etc., in launching your operation.

SUPPLIES. For home office or truck.

TAXES, LICENSES AND OTHER GOVERNMENT FEES. Half your self-employment tax is deductible. Fines and citations for illegal activity, such as speeding or hauling overweight loads, are not tax-deductible.

TRAVEL. Airline tickets, rental cars, lodging.

TRUCK LEASE. Under a lease-purchase, 100 percent of your truck payments are deductible. Security deposits are not deductible.


SPECIFIC DEDUCTIONS
Here are some of the more common deductions available:

ADMINISTRATIVE FEES / BUSINESS COSTS
Accounting services
ATM fees, bank fees
Broker, legal fees
Comdata, Comchek
Co-drivers, lumpers
Computer supplies
Credit card fees
Education
Fuel card fees
Ledger books
Office supplies
Photocopies and faxes
Postage, FedEx, TripPak
Software
Trade magazines
Trade memberships

COMMUNICATIONS
CB equipment and repairs
Cell phones and accessories
Phone cards
Qualcomm, Internet
Satellite communications

INSURANCE
Bobtail/liability
Cargo insurance claims
Disability
Health, dental, vision
Occupational/accident
Physical damage

PERMITS, LICENSES, FEES
Fuel taxes and road taxes
Federal Highway Use Tax
IRP, licenses and permits
Parking, scales
Tolls, PrePass
CDL fees

PERSONAL
Drug tests
Eye exams, glasses
Gloves, coveralls
Laundry
Business-related mileage on personal vehicle
Motels
Safety shoes/boots

TRACTOR-TRAILER: EXTERIOR AND UNDER THE HOOD
Chains, tarps, pallets, bungee cords
Chrome
Coolant, antifreeze
Fuel and fuel additives, filters
Headache racks
Kingpin locks, padlocks
Load locks
Oil, lube
Repairs, parts, labor
Shop equipment
Tires and repairs
Trailer and tractor washes

TRACTOR: INTERIOR
Accessories
Appliances
Atlases and maps
Bedding, sheets
Cameras
CD players
Cleaning supplies
Coffeepots and cookers
Coolers and ice
DVD players
Flashlights and batteries
Hoses and cables
Kitchen supplies
Luggage
Microwave ovens
Refrigerators
Rugs, floor mats
Seat covers, cushions
Thermoses
Trash bags
TVs, VCRs
Vacuums

The Business Manual for Owner-Operators
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