Tax Rebates for Your Trucking Business

pexels-karolina-grabowska
Although there are unique challenges and benefits to running a trucking business, at the end of the day, you’re tasked with meeting the same goals faced by business owners the world over: namely, saving money, growing the business and ensuring quality customer service. There are plenty of ways to accomplish these goals, but the transportation industry by its very nature offers you some advantages when it comes to tax savings through deductions and rebates.

Common Deduction Considerations in the Trucking Industry

Below are just a few of the many commonly used deduction advantages utilized in the trucking and vehicle service industries:

Section 179 Deduction Advantages

Section 179 of the IRS Code deals with deduction considerations involving purchases of equipment made by businesses. Within Section 179, you’ll find that many purchases, including those involving vehicles and trailers, can be deducted from that year’s tax liability at the full purchase price. This can also apply to leased vehicles. Keep in mind that there are caps placed on the totals that can be deducted, and these caps can change year to year. Additionally, this section of the IRS Code has limitations regarding usage of purchased vehicles.

Fuel Deduction Advantages

Many businesses use company vehicles as a means of transportation for employees, but trucking is unique because the industry relies on fuel purchases daily to keep things running. Thankfully, fuel purchases can often be deducted as well. This can be done using the actual mileage rate or the standard mileage rate. Essentially, the amount that can be deducted is based on the amount of miles a company vehicle is driven within the tax year, and these miles are converted into dollars based on the year’s mileage expense rate.

Licenses, Fees and More

On top of purchases of company vehicles and fuel expenses, your deduction amounts can also be made based off of costs for licenses, fees and per diem expenses. You can not, however, deduct expenses for things like penalties or traffic tickets. Depending on how your trucking business is designed, you may also qualify to deduct up to 50% of your self-employment tax through an income tax deduction.

Contact your Tax Professional

To learn more about your options, you’re strongly encouraged to engage with your business tax professional. He or she can evaluate your current needs and ensure that your business is taking advantage of as many legal deductions and rebates as possible. While filing your own business taxes is certainly possible, most experienced business owners agree that it pays to have a trusted tax professional involved to avoid mistakes while maximizing savings.