If you drive a vehicle for work, whether a bus, truck, or taxi, you can expect to receive a Form W-2 Wage and Tax statement which documents your income and withholdings from your employer. If the option for ‘Statutory Employee” is checked in Box 13, you’ll need to file a Schedule C, Profit and Loss from Business, and report the income. You are considered a statutory employee if you work for an agency or on commission.

Self-employed drivers must also report their income on a Schedule C. Instead of a Form W-2, you can expect to receive a Form 1099-MISC, Miscellaneous Income. Tips are considered table income, and must be reported. If you make over $400, you have to pay self-employment tax, and may be required to make estimated tax payments to cover the amount you reported on Schedule C.

In order to reduce your tax liability, you should deduct unreimbursed expenses you incurred that relate to your job. If you work for a company as an employee, you can claim expenses as a miscellaneous Itemized Deduction. Self-employed drivers may be able to deduct expenses on a Schedule C. Like all credits, you should keep receipts to back up your deductions.

You can deduct costs associated with:

• Tolls, parking fees, standard mileage rate, registration fees, insurance, tires, fuel, and other vehicle expenses, including depreciation if you own the vehicle
• Traveling long distances, such as lodging, laundry, and limited meals
• Trade and union dues
• State or local government regulatory fees and licensing
• Liability insurance
• Trade magazine subscriptions
• Excise taxes and flat rate occupational taxes
• Mandatory uniforms and accessories (such as work gloves or safety shoes) provided they are not acceptable for everyday wear and are required by the company you work for.
• Leasing or renting costs (such as a trailer rental or cab fee paid to the company for use of their vehicle)

You may also be able to deduct cargo losses and pay you gave to other employees who assisted you. However, if these other drivers are your employees, you may need to pay applicable employment taxes such as Social Security and Medicare taxes.

Travel Expense Deductions

You can deduct travel expenses provided you are away from your determined tax home for longer than the typical workday. This generally applies to long distance drivers who can prove their expenses, by keeping receipts or a log of the expense, time, place, and business relation. You need to determine your tax home before you can know if you are traveling away from it.

Your tax home:

• Is your regular place of business, regardless of where you live.
• Includes the city and metro area where your work is located.
• Refers to the main place of business, if you have multiple locations where you do work.
• Can be your home if you have no regular place of business.
• If you have no regular home or place of work, you must follow transient tax rules.
• Can be the location of given assignments, if you are self-employed.

Meal Allowance

There is a standard meal allowance of $46 per day in most small localities. You can use this standard deduction when traveling to eliminate having to calculate each place you stop. In the transportation industry, the standard meal allowance raises to $59 a day which includes truck drivers and bus drivers. If you use the special rate, you are required to use that same rate for every trip you take that year.

Otherwise, you can only deduct 50% of your actual business-related meal expenses. Though, the IRS allows an 80% deduction if the meals take place during the Department of Transportation’s hours of service limits.