Earning a living as a trucker can be rewarding, but it´s no easy task. With long hours on the road and miles that just keep adding up, it´s particularly challenging for long-haul truckers to maintain detailed records of mileage for tax credits, keep ample receipts, log each job, and manage expenses—all crucial for filing an accurate annual tax return. Being away from home without a personal computer makes this annual chore even more daunting.

Seeking the help of an experienced tax attorney or preparer can prevent truckers from filing their taxes late with the IRS.

How much do truckers pay in taxes? Truck drivers face a significant tax burden, including income taxes, excise taxes, payroll or self-employment taxes, among others. Fortunately, with some proactive tax planning, truckers can significantly reduce their tax liability.

Tax Preparation for Truck Drivers: There are attorneys and tax preparers who specialize in tax returns for truckers, a niche area of tax expertise. Truck drivers need tax professionals who can minimize their exposure to audits. This is one of the first questions any prospective tax advisor should be asked before hiring.

How do truckers file their taxes?

Most independent contractors hire tax preparers who prepare and report their income and expenses on their Form 1040 income tax returns each year. These expenses are reported on Schedule C attached to Form 1040. Other truckers might own an "S" corporation or LLC, which can help reduce personal taxes.

For employees, employers must withhold income tax and remit it to the IRS. They must also pay and withhold employment taxes, such as Social Security, Medicare, and federal unemployment taxes. These truckers only need to file their income tax on Form 1040 each year.

The Tax Cuts and Jobs Act of 2017 eliminated most deductions for truckers who are employees. These truckers should negotiate with their employers to get reimbursed for expenses.

Form 1099 / Taxes for Independent Contractor Truck Drivers: Many truckers are independent contractors, meaning employers do not withhold taxes.

Is the 1099 beneficial for truckers? Yes and no. It´s good because it means more money in hand as a driver. However, there are drawbacks; truckers usually have to file quarterly taxes and pay the IRS every three months. If a trucker fails to make quarterly payments, they will face penalties and interest on late payments to the IRS, a common scenario among truckers.

Self-Employment Taxes for Truck Drivers: Contract payments also incur taxes. Truckers working as contractors must pay self-employment taxes.

For truckers not operating their businesses through legal entities, self-employment taxes are calculated and remitted to the IRS on Form 1040. For more information, please don´t hesitate to call us.