Deductions by trade

What a contract driver can deduct.

For drivers paid on a 1099-NEC who drive a truck they do not own — leased on to a carrier, contracted to a fleet, or placed through an agency. You file Schedule C. If you own the truck, the owner-operator page goes considerably further.

Tax year 2026

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Per diem is your largest deduction, and it is 80 percent, not 50.

If you are subject to Department of Transportation hours-of-service limits, qualifying meals while away from your tax home may be deductible at 80 percent rather than the usual 50 percent. Instead of keeping food receipts, you may use the special transportation-industry allowance applicable to each travel date; it changes on 1 October, and the first and last day use 75 percent of the applicable rate. The condition is real: you must be away from your tax home long enough to require sleep or rest. A trip that starts and ends at home the same day does not qualify, however many hours it ran.

What the deduction is made ofA contract driver, 250 nights away

Illustration using an $80 full-day allowance, the 80% limit and 250 qualifying days. Actual results depend on the rate applicable to each date and your records.

Per diem and nights away

One record carries this deduction. Without it there is nothing to claim, and it cannot be built afterwards.

A record of every night away from homeYour electronic logs are the cleanest proof there is — date, time and location, generated as you drive. Download them and keep at least three years; the carrier will not keep them on your behalf.
Full days and partial daysUse the special transportation-industry allowance applicable to the travel date. The rate changes on 1 October, and departure and return days use 75 percent of the applicable full-day rate.
The rate or the receipts, not bothYou pick one method for the whole year. Almost every driver comes out ahead on the rate, and it is far less work.Tax tip. Choose the rate, and choose before the year starts: the method applies to all twelve months. At $64 a day deducted it almost always wins, and it asks for a log rather than a shoebox.
Lodging is separateThe transportation rate covers meals and incidentals only. A motel room is deducted at what you actually paid, in full, with the receipt.
Showers and laundry are separate tooThey are travel costs rather than meals, so they are not inside the per diem rate and they are not cut to 80 percent. Keep those receipts apart from everything else.Tax tip. Keep these in their own envelope. They are deducted in full while meals are cut to 80 percent, and folding them into the food pile is how a full deduction quietly becomes a partial one.

What the carrier takes out of your pay

Money that never reached your bank account is still your income, and what was taken out of it is still your expense. This is where most contract drivers lose several thousand dollars a year, simply because they never saw the money move.

Every settlement statement for the yearRead them line by line. Fuel, insurance, plates, trailer rent, tolls and fuel advances charged back to you are your expenses and belong on Schedule C.Tax tip. Every line the carrier took out is an expense you have already paid and probably never counted. Pulling twelve settlement statements is usually the best-paid hour of your year.
Dispatch, agency and load-board fees taken from your pay
A lease-purchase agreementTreated very differently depending on whether it is a true lease or a purchase wearing a lease's clothes. Bring the contract — this one changes the return substantially.
Escrow held by the carrierNot an expense when it is withheld. It becomes one when it is actually spent on something deductible, and it is income back to you if it is returned.
Cargo claims, damage and lumper fees you paidGet a receipt for a lumper. It is a cash expense with no other trail, and without paper it simply disappears.

Gear, tools and the cab

Bought for the truck and used in it. Something that comes home and gets used at home is at best partly deductible.

Gloves, safety boots, hi-vis, hard hat, safety glasses
Load bars, straps, chains, binders, tarps and bungees
Tools, torque wrench, tyre gauge, air hose, jumper cables
Cooler, twelve-volt fridge, inverter, bunk heater, bedding for the sleeper
Logbook supplies, a portable printer, an ELD subscription
The phone, at the business shareIf it is also your personal phone, deduct the business portion and be able to say how you arrived at it. A second line used only for work is simpler and fully deductible.

Licences, medicals and compliance

CDL renewal and endorsements — hazmat, tanker, doubles and triples
DOT physical, and the drug and alcohol consortium fee
TWIC card, border-crossing and FAST cards
Background checks and motor vehicle record fees
Required training and safety coursesTraining that keeps or improves the skills of the work you already do. Training to get into a different trade is not deductible.

Your own car

Smaller than the truck side of this page, and still worth having, because nobody else records it for you.

The drive from home to the terminal does not countThat is commuting. What counts are business trips that are not commuting — to a DOT physical, a repair shop, the licensing office, or to collect a load in your own vehicle.
The standard rate for 2026 runs at two levels: 72.5 cents a mile to 30 June and 76 cents from 1 JulyThe log has to be subtotalled at the end of June. One rate across the year understates the second half.
Make, model, the date you first used it for business, and the year's total, business and commuting milesFour numbers, asked for on the return itself. Nobody remembers them in April.

Running the business

Occupational accident and liability insurance you buy yourself
Business bank charges, and interest on business purchases
Accounting, bookkeeping and tax preparation for the businessThe portion covering Schedule C. Preparing your personal return is not a business expense.
A home office used regularly and exclusively for the paperworkHarder for a driver who is away most of the year, and it must be your only fixed place for administration. Worth asking about rather than assuming either way.
Entity formation, registered agent and annual report fees, if you set up an LLC

Your own taxes and benefits

Not Schedule C expenses, but they are where a contract driver's tax bill is actually decided.

Quarterly estimated paymentsApril, June, September and January. Nobody withholds anything for you. This is the single most common reason a first-year contract driver reaches the spring owing money that is no longer there.Tax tip. Move a fixed share of every settlement into a separate account the day it lands — roughly a quarter to a third for most drivers. The quarterly payment then becomes a transfer instead of a crisis.
Self-employment tax, and the deduction for half of it15.3 percent on business profit, on top of income tax. Half of it comes back as a deduction on the return.
Health insurance you buy yourselfDeducted against income rather than on Schedule C, and only if you are not eligible for a plan through a spouse's employer.
A SEP-IRA or a solo 401(k)Far higher limits than an ordinary IRA, and one of the few levers still available after 31 December.Tax tip. The only lever left after 31 December: a SEP can be funded right up to the filing deadline, extensions included. Worth knowing before you see the number you owe, not after.
The qualified business income deductionUp to 20 percent of business profit, worked out on the return rather than on Schedule C.

Whether you should be on a 1099 at all

Not a comfortable question, and it comes up constantly in trucking. It is worth thousands of dollars a year, so it is worth asking properly.

A contractor controls how the work gets doneIf the carrier sets your schedule, assigns your loads, dictates your route and will not let you haul for anyone else, the word 'contractor' on the paperwork may not hold.
A 1099 moves the whole payroll tax to you15.3 percent self-employment tax instead of the 7.65 percent an employee pays, plus quarterly payments, no unemployment cover and no workers' compensation.
Form SS-8 asks the IRS to decideA real option with real consequences for the working relationship. Worth talking through before filing it, not after.
The return is filed on how you were paidReclassification is a separate process. It does not change the Schedule C you owe for a year already worked.

What you cannot deduct

All of this appears on someone's list of trucker write-offs. None of it survives a serious look.

Meals on a trip that started and ended at homeNo overnight rest, no per diem.
Per diem and actual meal receipts for the same trip
The drive from home to the terminal
Everyday clothesJeans and boots you would wear anyway. Steel toes and hi-vis are a different matter.
The truckYou do not own it. The depreciation belongs to whoever does.
Money you pay yourselfAn owner's draw is not an expense and does not reduce the profit you are taxed on.
The full phone bill when the phone is also personal
Fines and citations — overweight, logbook, speeding, parking
Escrow the carrier is holding, until it is actually spent
Deadhead miles, detention you were not paid for, or a load that paid badlyIncome you did not earn is not a deduction.
A cash payment with no invoice and no record of who received it

Before you file

Two things decide a contract driver's return. The first is a complete record of nights away from home, which is your largest deduction and the one nobody can rebuild for you. The second is the full set of settlement statements, because that is the only place the expenses the carrier already took out of your pay are written down. Bring both and the rest is arithmetic.

Open the business checklist

Not sure which of these apply to you?

A list is a starting point, not an answer. Bring your own numbers to a free intro call and we will work out which of these belong on your return and what is missing from your records.

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This page is general information for the 2026 tax year, not advice about your business. A deduction has to be ordinary and necessary for your own trade, and your records have to support it. Amounts and rules are current as of the date of publication and can change.