Tax season is here – now is the time to think about filing your taxes. As an owner-operator, you are considered self-employed or what is known as an independent contractor. You are responsible for paying taxes instead of your taxes being taken out of your check. So, as an independent contractor, you are eligible for tax deductions. Knowing which deductions, you are eligible for can help lower your tax responsibility.
Continue reading below to find answers to the most common tax questions for owner-operators.
Tax Deduction Questions
Question: What tax forms do owner-operators need to file?
Answer: As an owner-operator, you will receive a Form 1099-NEC for every carrier you have worked for during the tax year. If you have employees, you will need to issue a W-2 form for them. You will need to file your taxes using Form 1040 and include Schedule C to report your business income and expenses. If your net earnings exceed $400, you will also need to file a Schedule SE to calculate self-employment tax.
Question: How much should I set aside for my business taxes?
Answer: Something to remember is to set aside 25% - 30% of your net earnings for taxes. This amount will help cover federal and state income taxes along with self-employment taxes.
Questions: What will happen if I do not pay my quarterly taxes?
Answer: If you do not pay your estimated taxes each quarter, this can lead to IRS penalties and interest charges. The IRS expects self-employed individuals to make estimated tax payments if they anticipate owing more than $1,000 in taxes for the year.
Question: Do owner-operators receive tax returns?
Answer: Most independent contractors do not receive tax refunds. However, if you do overpay your estimated taxes, you may then receive a refund when you file your tax return.
Per Diem Tax Questions
Question: How does the Per Diem tax deduction work?
Answer: The Per Diem tax deduction will cover meals and other incidental expenses that were incurred while traveling away from home for business-related purposes. As of 2025, the Per Diem rate is 80% of $71 per full day, with ¾ of the rate for partial days. Days off taken for personal reasons are not eligible for the Per Diem deduction.
Question: Can I use my e-log records to help track my Per Diem days?
Answer: Yes, e-log records are valid documentation for Per Diem deductions. You should request copies from your carrier every 3-4 months since some carriers delete their records after six months.
Tax Deduction Questions
Question: Is fuel tax deductible?
Answer: Fuel expenses that were incurred for business purposes are fully tax-deductible for owner-operators.
Question: Can I claim my home office as a deduction?
Answer: You may qualify for a home office deduction if:
Your home office was used exclusively and regularly for your business purposes
It is the primary place of business where administrative work was done
Question: can my gym membership be tax-deductible?
Answer: Gym memberships are only allowed as a deduction if prescribed by a doctor to treat a specific medical condition and obtained after a diagnosis.
Question: Are medical expenses deductible?
Answer: You can deduct qualified medical expenses exceeding 7.5% of your Adjusted Gross Income (AGI).
Question: Are expenses for a guard dog deductible?
Answer: If your dog provides security for your truck, it could qualify as a business dog, making expenses such as food and vet bills, tax-deductible. However, proper documentation will be required to substantiate this type of claim.
Final Tips for Owner-Operators
By taking advantage of eligible deductions and staying organized, you can reduce your tax burden and maximize your earnings as an owner-operator. Below are some quick tips for owner-operators during tax time.
· Record Keeping – keep track of all receipts that are related to your business expenses.
· Mileage Tracking – keep track of all mileage along with toll expenses, parking fees, and travel costs.
· Ensure that you are making timely quarterly tax payments to avoid penalties.
· Consult with a tax professional to help maximize your tax deductions.
· File your taxes by April 15, 2025, to be compliant with the IRS deadlines.