Running a trucking company means managing fuel costs, equipment purchases, driver wages, insurance premiums, and dozens of other expenses before a single dollar of profit shows up. The good news? Many of those costs are tax-deductible, and claiming every eligible write-off can reduce your tax bill by thousands each year.
Contact Clear Peak Accounting today to make sure your trucking company captures every deduction available in 2025.
Below, we break down the specific deductions trucking companies should be claiming, how Section 179 and bonus depreciation work for truck purchases, what per diem rates apply to drivers on the road, and which California-specific considerations fleet owners need to know about.
Who Qualifies: Owner-Operators, Company Drivers, and Fleet Owners
Not every person in the trucking industry can claim the same deductions. Your tax treatment depends on how your business is structured and whether you work as an employee or a self-employed operator.
Owner-operators and sole proprietors report income and expenses on Schedule C (Form 1040). They can deduct business expenses directly against their revenue, including fuel, maintenance, insurance, and per diem. This is the most flexible setup for maximizing deductions.
Fleet owners operating as an LLC, S corporation, or C corporation deduct business expenses on the company’s tax return (Form 1120, 1120-S, or 1065 for partnerships). Entity-level deductions include driver wages, fleet maintenance, dispatch software, and office overhead. If you operate as an S corp, make sure you calculate a reasonable S corp salary to optimize your self-employment tax savings.
W-2 company drivers have the fewest options. Since the Tax Cuts and Jobs Act of 2017 suspended the unreimbursed employee business expense deduction through 2025, W-2 drivers generally cannot deduct trucking expenses on their personal returns. However, employers can reimburse drivers for expenses under an accountable plan, which keeps those costs deductible for the company.
Top Tax Deductions Every Trucking Company Should Claim
Here are the deductions that make the biggest impact on a trucking company’s bottom line.
Fuel and Diesel Costs
Fuel is typically the largest single expense for any trucking operation. Whether you pay at the pump or through a fuel card program, every gallon of diesel used for business purposes is deductible. Keep detailed fuel receipts or use fuel card statements as documentation. For owner-operators logging 120,000 miles per year at 6 miles per gallon and $4.00 per gallon, that is roughly $80,000 in deductible fuel costs alone.
Vehicle Maintenance and Repairs
Oil changes, tire replacements, brake work, transmission repairs, and routine inspections are all deductible. This includes both labor and parts costs. If you have a dedicated shop or maintenance facility, the rent, utilities, and equipment for that space count as well.
Insurance Premiums
Trucking companies carry multiple insurance policies, and all business-related premiums are deductible. This covers liability insurance, cargo insurance, physical damage coverage, workers’ compensation, and general business insurance. Given that commercial truck insurance averages $8,000 to $14,000 per truck per year, this deduction adds up fast for fleet owners.
Licensing, Permits, and Fees
The trucking industry requires more permits and fees than most businesses. Deductible items include CDL renewal fees, International Registration Plan (IRP) fees, International Fuel Tax Agreement (IFTA) filings, oversize/overweight permits, and state-specific operating authority permits. The logistics accounting for trucking companies involved in tracking these fees is worth the effort at tax time.
Heavy Highway Vehicle Use Tax (HVUT)
If you operate vehicles with a taxable gross weight of 55,000 pounds or more, you must pay the HVUT (reported on IRS Form 2290). The tax ranges from $100 to $550 per vehicle per year depending on weight. The HVUT you pay is fully deductible as a business expense.
Tolls and Parking
Highway tolls, bridge tolls, and truck parking fees incurred during business operations are deductible. Use an electronic toll transponder or keep receipts to create a clear paper trail.
Driver Wages, Benefits, and Payroll Taxes
For fleet owners who employ drivers, all compensation-related costs are deductible. This includes wages, health insurance contributions, retirement plan contributions, payroll taxes (employer’s share of FICA), and workers’ compensation premiums.
Dispatch and Technology Costs
Electronic logging devices (ELDs), GPS tracking systems, fleet management software, load board subscriptions, and communication equipment are all deductible. As the industry moves toward more technology-driven operations, these costs continue to grow, and every dollar spent on compliant technology reduces your taxable income.
Looking for more ways to lower your tax bill? Review our tax planning strategies for companies to find additional savings opportunities beyond standard deductions.
Section 179 and Bonus Depreciation for Trucks and Equipment
Buying or financing a new truck, trailer, or piece of equipment? You do not have to wait years to recover that cost through depreciation. Two tax provisions let you write off large purchases faster.
Section 179 Expensing
Section 179 allows businesses to deduct the full purchase price of qualifying equipment in the year it is placed in service, rather than depreciating it over several years. For 2025, the deduction limit is $1,250,000, with a phase-out threshold beginning at $3,130,000 in total equipment purchases. Qualifying items for trucking companies include semi-trucks, trailers, refrigeration units, forklifts, and shop equipment.
For example, if your company purchases a $180,000 Class 8 truck and places it in service in 2025, you can deduct the full $180,000 in that tax year under Section 179, rather than spreading the deduction across five or seven years.
Bonus Depreciation (2025 Update)
Bonus depreciation allows a first-year deduction on new and used qualifying assets. However, the 100% bonus depreciation that was available through 2022 has been phasing down. For 2025, the bonus depreciation rate is 40%, meaning you can deduct 40% of the cost in the first year, with the remainder depreciated over the standard recovery period.
Many trucking companies use Section 179 first (up to the $1,250,000 cap) and then apply bonus depreciation to any remaining equipment cost. A CPA who specializes in trucking can help you time purchases and structure deductions for maximum benefit. If you are looking for that kind of help, learn how to find a CPA who specializes in trucking.
Per Diem, Meals, and Travel Deductions Explained
Drivers who spend nights away from home on business are eligible for per diem deductions, which cover meal and incidental expenses during travel.
How Per Diem Works for Trucking
Instead of tracking every meal receipt, owner-operators and trucking companies can use the IRS standard per diem rate. For the transportation industry, the IRS allows a special rate of $69 per day for travel within the continental United States (CONUS) and $74 per day for travel outside CONUS (including Alaska and Hawaii). These rates are set annually and may change, so confirm the current figures each year.
For self-employed owner-operators, the meal portion of per diem is currently 80% deductible (compared to the standard 50% for most industries). This higher rate recognizes that long-haul drivers have fewer options for cooking their own meals.
What Counts as “Away From Home”
To qualify for per diem, a driver must be away from their tax home (the city or general area where they regularly work) and the trip must require sleep or rest. A driver who makes local deliveries and returns home each night does not qualify. However, a driver on a multi-day haul who sleeps in the cab or at a motel does qualify for each day away.
Travel-Related Deductions Beyond Per Diem
In addition to per diem, trucking companies can deduct lodging costs (when drivers stay at motels rather than sleeping in the cab), laundry expenses on the road, and truck washes. Parking fees at truck stops are also deductible when incurred during overnight stays.
What Can a Trucking Company Write Off? Often-Missed Deductions
Beyond the obvious expenses, several deductions slip through the cracks for trucking companies that do not have the right accountant for their trucking company.
- Safety gear and uniforms: Steel-toe boots, hi-vis vests, hard hats, work gloves, and uniforms with company logos are all deductible. So are cleaning costs for those items.
- Medical exams and drug testing: DOT-required physicals, CDL medical certificates, and random drug/alcohol testing costs are deductible business expenses.
- Association memberships: Dues for the American Trucking Associations (ATA), Owner-Operator Independent Drivers Association (OOIDA), or state trucking associations are deductible.
- Training and education: CDL training, hazmat certification, defensive driving courses, and continuing education related to your business all qualify.
- Home office deduction: If you manage dispatch, billing, or administrative tasks from a dedicated home office, you can deduct a portion of your rent or mortgage, utilities, and internet costs.
- Cell phone and internet: The business-use percentage of your phone bill and data plan is deductible.
- Clean vehicle credits: Trucking companies investing in electric or alternative-fuel vehicles may qualify for the Clean Vehicle Credit under IRC Section 30D or the Commercial Clean Vehicle Credit under Section 45W, which can provide credits up to $40,000 per qualifying commercial vehicle.
- Depreciation on trailers and equipment: Flatbeds, reefer trailers, dollies, loading equipment, and shop tools all have depreciable lives and can be written off over time or expensed under Section 179.
Schedule a consultation with Clear Peak Accounting to review your deductions and find savings you may be missing.
California-Specific Tax Considerations for Trucking Companies
Trucking companies based in California, or those running loads through the state, face additional tax rules that differ from federal standards.
California conforms to Section 179, but with a lower cap. While the federal Section 179 limit for 2025 is $1,250,000, California caps the deduction at $25,000. This means a California-based trucking company that deducts $180,000 under federal Section 179 must add back $155,000 on its California return. Planning around this difference is important for accurate cash flow projections.
California does not conform to federal bonus depreciation. Any bonus depreciation claimed on your federal return must be added back when calculating California taxable income, then depreciated using California’s standard schedule. This creates a timing difference that affects your state tax payments, especially in the year you purchase new trucks.
Diesel fuel taxes in California include both an excise tax and a sales tax component. The state excise tax rate on diesel is $0.454 per gallon as of 2025, among the highest in the country. While these taxes are built into the pump price and deductible as part of your fuel expense, understanding the cost breakdown helps with route planning and budgeting. Trucking companies filing IFTA returns must also account for California’s higher fuel tax rate when calculating net taxes owed across states.
California franchise tax applies to LLCs and corporations doing business in the state. Even if your trucking company is an LLC with zero net income, you owe a minimum $800 annual franchise tax. S corps and C corps face the same minimum. Keep this in mind when evaluating your entity structure.
For companies juggling multi-state operations, staying on top of quarterly estimated tax payments is critical to avoid underpayment penalties.
How Your Entity Structure Affects Your Tax Bill
The way your trucking business is organized directly impacts which deductions you can take and how much you pay in self-employment tax.
Sole proprietorship: Simplest structure. All income flows to your personal return on Schedule C. You pay self-employment tax (15.3%) on net earnings. Every deduction reduces both your income tax and your SE tax.
Single-member LLC: Treated the same as a sole proprietorship for tax purposes unless you elect S corp or C corp status. The LLC provides liability protection but no inherent tax advantage on its own.
S corporation election: If your trucking company earns enough, electing S corp status can lower your self-employment tax burden. You pay yourself a reasonable salary (subject to payroll taxes), and the remaining profit passes through as a distribution not subject to SE tax. For an owner-operator netting $150,000, the SE tax savings from an S corp election can exceed $10,000 per year. Make sure you have the documents you need for an LLC tax return if you are filing under this structure.
C corporation: Larger fleets may operate as C corps. The corporate tax rate is a flat 21%, which can be advantageous for companies reinvesting profits into equipment and fleet expansion. However, distributions to owners are taxed again as dividends, creating double taxation. Larger fleets should review corporate tax planning strategies to minimize this impact.
Your Trucking Tax Deduction Checklist
Use this checklist before filing your taxes to make sure you have not overlooked anything. Review each category with your CPA and gather supporting documentation for every item you claim.
| Category | Deductible Items |
|---|---|
| Fuel | Diesel, DEF (diesel exhaust fluid), fuel card fees |
| Vehicle Costs | Truck payments (interest portion if financed), lease payments, depreciation, Section 179 |
| Maintenance | Oil changes, tires, brakes, engine repairs, truck washes |
| Insurance | Liability, cargo, physical damage, workers’ comp, health insurance |
| Licensing and Fees | CDL fees, IRP, IFTA, HVUT (Form 2290), operating authority permits |
| Travel | Per diem ($69/day CONUS), lodging, parking, tolls |
| Technology | ELD devices, GPS, fleet management software, load boards, communication equipment |
| Office and Admin | Home office, accounting software, phone/internet, office supplies |
| Personnel | Driver wages, payroll taxes, benefits, training costs |
| Safety and Compliance | DOT physicals, drug testing, safety gear, uniforms |
| Professional Services | CPA fees, legal fees, association dues, consulting |
Frequently Asked Questions
What can a trucking company write off on taxes?
Trucking companies can write off fuel, vehicle depreciation, maintenance and repairs, insurance premiums, per diem for drivers away from home, tolls, parking, ELD and technology costs, driver wages, licensing fees, HVUT payments, and professional services like CPA and legal fees. The key is keeping organized records and receipts for every business expense.
How much can a trucker write off per day for meals?
The IRS allows transportation workers to use a per diem rate of $69 per day (CONUS) for meals and incidental expenses. The meal portion is 80% deductible for self-employed drivers in the transportation industry, compared to 50% for most other businesses. Drivers must be away from their tax home overnight to qualify.
Can I deduct the purchase of a new semi-truck?
Yes. Under Section 179, you can deduct up to $1,250,000 of the purchase price of a qualifying truck in the year you place it in service (2025 federal limit). You can also apply 40% bonus depreciation on top of that. California has a lower Section 179 cap of $25,000, so state-level treatment will differ from federal.
Do I need a CPA for my trucking company?
While not legally required, a CPA who understands the trucking industry can identify deductions you might miss, help you choose the right entity structure, handle multi-state tax compliance, and ensure your per diem calculations are correct. The savings from proper tax planning typically far exceed the cost of professional accounting. Learn how a trucking accountant can maximize your savings.
What is HVUT and is it deductible?
HVUT stands for Heavy Highway Vehicle Use Tax. It applies to vehicles with a taxable gross weight of 55,000 pounds or more, and it is reported annually on IRS Form 2290. The tax ranges from $100 to $550 per vehicle depending on weight. The amount you pay is fully deductible as a business expense on your income tax return.
Keeping track of every deduction is just one part of running a profitable trucking business. For a broader look at managing your finances, explore our trucking CPA financial success strategies, or explore our business tax planning services to see how Clear Peak Accounting can help your trucking company keep more of what it earns.
Get in touch with Clear Peak Accounting for expert trucking tax support tailored to your business.