With frequently changing tax regulations, it gets difficult for business owners and employees to keep up with the latest regulations. Understanding tax issues relevant to your industry is essential for business owners to comply with the local laws and regulations.

But complex tax issues require expert accountants to handle the work. You must trust experienced accountants to file tax returns for you. And in case you don’t want to hire a full-time accountant, hire professional tax consultants to help you file tax returns accurately to avoid any chaos while you focus on business growth.

This article covers everything truckers need to know about taxes in 2021!

Needing a Tax Home

A tax home is a city or area where you are working, and it can be different from the area you live in. According to Internal Revenue Service (IRS), a tax home is a regular duty place. It includes the city or area where your organization is located.

Being a trucker will require you to travel and make deliveries in different parts of the country. When you establish a tax home, it allows you to take deductions to other cities or states for travel expenses and keeps the untaxed income in your contract tax-free.

The IRS will disregard the deductions if you claim a long-haul expense without having a tax home.

Truck Driver Tax Deductions

Here are some of the tax deductions that the IRS allows truck drivers to deduct:

Truck Maintenance

The expenses of truck maintenance include oil changes, washer fluid, tire change, and cleaning supplies. You can deduct these costs if you pay for the maintenance and supplies.

Union or Professional Association fees

If you are a part of any union or professional association, then the organization’s fees can be deducted from your taxable income.

Uniforms

The cost for work uniforms like specialized work gear, protective gloves, goggles, or boots is deductible only if required, and the employer refuses to pay for them.

Office Supplies

Office supplies, including logbooks, clipboards, maps, writing supplies, and others, are also tax-deductible items for truck drivers.

Travel Expenses

Drivers who have filed their tax home can deduct expenses for overnight stays and standard meal allowance depending on their location. Truckers can also take a higher meal allowance for the Hours-of-Service regulations.

Work-Related Fees

Some work-related fees that are tax-deductible include drug testing fees, driver license renewal fees, DOT physical exams, sleep apnea study costs, and more.

Tips to Manage Taxes

Here are some things to consider to keep your taxing issues chaos-free:0

Send Books to the Accountant

One of the best ways of getting ready for the upcoming tax season is by sending your books to a professional accountant. The accountant will analyze your books and prepare tax returns. The accountant will help you submit all necessary documents.

Max Out Health Savings Account

Getting a health savings account (HSA) will set aside pretax income for covering health care costs that insurance doesn’t pay. In 2020, the maximum contributions for individuals were $3,550, and for family coverage, $7,100. HAS does not support use-it-or-lose-it provision, which means that any funds that are still in the plan can be rolled over indefinitely at the end of the year.

Prepare 1099’s for Contractors

The new 1099-NEC form is now used for reporting payments made to independent contractors for services. If drivers pay someone who is not their employee, such as a subcontractor, attorney, or accountant, with $600 or more fees, then Form 1099-NEC is must be completed. A copy of the 1099-NEC must be submitted to the independent contractor and IRS by January 31 of the year following payment.

But if you want to save yourself the trouble, hire an experienced agency to do the taxing for you.