Being a part of a fleet can incur a lot of out of pocket expenses, but do you know which ones qualify as tax deductible? When you combine the use of a fleet fuel card with thorough documentation of your annual expenses, you’re truly maximizing your fleet’s cash flow.
There is a surprising amount of expenses that qualify for deductions on tax returns that can put thousands of dollars back in your pocket. According to the IRS, any expense that’s “ordinary and necessary” is eligible for a tax deduction. Read this list of surprising expenses that qualify as tax deductible so you can start keeping track today.
You probably know that all truck maintenance is considered ordinary and necessary, and therefore, is tax deductible. But did you know that personal health and hygiene expenses for your drivers qualify as well? Any health-related cost is necessary for the well-being of owner-operators, making them tax eligible.
The applicable expenditures include:
Most of these costs are small, but together, they add up to significant savings across your fleet of drivers. It is important that you only record expenses that you can specifically tie to being on the job. Otherwise, you could subject yourself to a troublesome audit.
In addition to driver maintenance, you can also deduct select operational costs of your business. There’s quite a bit of work that goes into being an owner-operator, on and off the road, and these expenses apply to your tax forms.
Some common business operation costs are:
Be sure to keep and organize any expense-related information for Tax Day.
You won’t be saving money if you don’t keep thorough documentation of your costs. For purchases that have receipts, keep them in an envelope or folder for safe keeping.
You can also scan the receipts and store them digitally. Then, categorize them into folders according to the divisions listed above. Any expense that you don’t have a receipt for can be tracked in a journal or spreadsheet. It’s important to record the expense, date, location, and amount.
Getting and staying on the road as an owner-operator is an expensive process but isn’t a burden that has to come completely out of pocket. Remember to keep track of all of your business-related expenses to keep more money in your account every tax season.