Deductions by trade
What an owner-operator can deduct.
For drivers who own or finance their own truck, whether running under their own authority or leased on to a carrier. Filed on Schedule C, or on Form 1065 or 1120-S if the business is a partnership or an S corporation.
Tax year 2026
The truck can be written off entirely in year one. That is not always what you want.
For 2026, 100 percent bonus depreciation is back and permanent, and a Class 8 tractor is well over 14,000 pounds, so none of the passenger-vehicle limits apply. A $150,000 truck bought and placed in service in 2026 can be deducted in full in 2026. It does not follow that it should be. Taking the whole deduction in a year when profit is low spends it at a low tax rate and leaves nothing to deduct in the profitable years that follow — and when you sell the truck, the deduction comes back as depreciation recapture, taxed as ordinary income. This is the largest single decision on your return, and it is worth modelling both ways before anyone signs anything.
The same total either way. Only the timing differs — and the timing is the whole decision.
The truck, the trailer and the heavy equipment
Bring the purchase paperwork and the date the truck actually went into service. Everything in this section starts there.
- Purchase price of the tractor and the trailer, with the in-service date for each
- Bonus depreciation, Section 179, or ordinary depreciation over the lifeSection 179 is capped at $2,560,000 for 2026 and cannot create a loss. Bonus depreciation can. Regular depreciation runs three years on a tractor and five on a trailer.Tax tip. Take the deduction in the year the profit is actually there, not automatically in the year you bought. A full write-off against a thin year is spent at a low rate and leaves the next three years with nothing to deduct.
- Financing: the interest is deductible, the principal is notOnly the interest portion of the payment is an expense. The truck itself is deducted through depreciation, never through the payments.
- A lease rather than a purchaseA true operating lease is deducted as rent, as paid. A lease-purchase is usually treated as a purchase. The terms decide this, not the title on the front page.
- APU, inverter, bunk heater, refrigeration unit, headache rack, lights and chrome
- A major rebuild — engine, transmission, a full set of drivesLarge repairs may have to be capitalised and depreciated rather than expensed. A $2,500 de minimis policy, adopted in writing, covers most of the smaller items cleanly.
- Selling or trading in an old truckThere is no like-kind exchange for equipment any more. A trade-in is a sale, and the gain is taxable — usually larger than expected if the old truck was already fully depreciated.Tax tip. A fully depreciated truck sold is almost all taxable gain. If a trade is coming, it is worth choosing which year it lands in — and what you are buying in the same year to absorb it.
Fuel and the road
- Fuel, DEF and reefer fuel
- IFTA filings and fuel tax paidFiled quarterly. Keep the returns — they also substantiate your miles by state, which is useful well beyond IFTA.
- Tolls, scales, parking and truck washes
- Tyres, brakes, oil changes and everything the shop bills you for
- Roadside assistance, towing and emergency repairs
- Straps, chains, tarps and securement replaced through the year
Permits, plates and taxes on the truck
- Form 2290 heavy highway vehicle use taxFor vehicles of 55,000 pounds or more. The tax year runs 1 July to 30 June, and the return is due 31 August for a truck already in service. The stamped Schedule 1 is what the state wants at registration.
- Apportioned plates, IRP registration and state permits
- Operating authority, UCR, BOC-3 and DOT number fees
- Oversize, overweight and trip permits
- ELD subscription, IFTA decals and the drug and alcohol consortium
- CDL renewal, endorsements and your DOT physical
Insurance
After fuel, usually the largest expense for a one-truck operation — and the one people gather least completely.
- Primary liability and cargo
- Physical damage on the tractor and the trailer
- Bobtail and non-trucking liability
- Occupational accident, or workers' compensation if you have employees
- General liability and an umbrella policy
- Your own health insuranceNot a Schedule C expense. It comes off income on the return itself, and only if you are not eligible for a plan through a spouse's employer.
What the carrier or the broker takes
Money that never reached your account is still your income, and what was taken out of it is still your expense. Both belong on the return.
- Dispatch, factoring and load-board fees
- Settlement deductions: insurance, plates, trailer rent, fuel advances
- Lumpers, detention paid out and pallet chargesAlways get a receipt for a lumper. It is a cash expense with no other trail.
- Escrow held by the carrierNot deductible when withheld. Deductible when spent, and income back to you when it is returned.
- Cargo claims and damage you covered yourself
Per diem and life on the road
- Eighty percent of the meal allowance, not fiftyDrivers subject to Department of Transportation hours-of-service limits may deduct 80 percent of qualifying meal costs. The optional special transportation-industry allowance uses the federal rate applicable to each travel date, with 75 percent of that rate for the first and last day; the rate changes on 1 October.
- A record of every night away from homeELD data is the cleanest proof, and three years is the minimum to keep. There is no reconstructing this one.
- Showers, laundry and motel roomsTravel costs rather than meals: not inside the per diem rate, and not cut to 80 percent. Keep those receipts separately.
- Bedding, cab supplies and what it takes to live in the truck
Running the business
- The phone at its business share, or a second line used only for the business
- Accounting, bookkeeping and tax preparation for the business
- Business bank charges, merchant fees and interest on business purchases
- A home office used regularly and exclusively for the paperworkRegularly and exclusively means nothing else happens at that desk. A whole room is not required; a dedicated corner is.Tax tip. It does double duty: the deduction itself, and it turns the drive to the yard or the shop into a business mile instead of a commute. For a local operation that second half is often the larger number.
- Legal fees, entity formation, registered agent and annual report
- Dispatch software, load boards, compliance and safety services
- Wages to a driver you employ, and the payroll taxes on themPaying a spouse or a child requires a real job, a real rate and real payroll filings. Done properly it works well. Done casually it does not survive a look.
Your own taxes and retirement
- Quarterly estimated paymentsApril, June, September and January.
- Self-employment tax, and the deduction for half of it
- A SEP-IRA or a solo 401(k)Limits are worked out from business profit, so for an owner-operator they run several times what an ordinary IRA allows.Tax tip. The last lever after 31 December, and the only one that lowers the tax while the money stays yours. A solo 401(k) usually allows more than a SEP at the same profit — but it has to exist before the year ends.
- The qualified business income deductionUp to 20 percent of business profit.
- Whether an S corporation is worth itA tax election rather than a separate company: an LLC can file as an S corporation and stay the same LLC.Tax tip. Worth asking once profit is consistently into six figures, and worth ignoring below that — the payroll, the extra return and the salary you must genuinely pay all cost real money. Run the comparison on your own numbers before anyone sells you the election.
What you cannot deduct
Every one of these gets claimed by somebody every season. None of them holds.
- The principal portion of the truck paymentOnly the interest. The truck is deducted through depreciation.
- The truck twiceDepreciation or the payments — not both, in any combination.
- Money you pay yourselfAn owner's draw is not an expense and does not reduce the profit you are taxed on.
- Everyday clothing
- The value of your own time, or weeks the truck sat and earned nothing
- Meals on a trip with no overnight rest
- Fines and citations — overweight, logbook, speeding, parking
- Escrow, until it is actually spent
- Personal use of the truck or the business cardSeparate it and record it. A business account used for groceries is the fastest way to put every other deduction on this page in doubt.
- A cash payment with no invoice and no record of who received it
Before you file
Bring three things and the return nearly writes itself: settlement statements for the whole year, the fuel and IFTA records, and the purchase paperwork for the truck with its in-service date. The depreciation choice on that last one is worth more than everything else on this page, and it is the one decision that is genuinely awkward to revisit later.
Open the business checklistNot 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.
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.