Two drivers can have the same expenses and very different deductions. An owner-operator files Schedule C and deducts the ordinary and necessary costs of running the truck: fuel, maintenance, insurance, depreciation, tolls, and meals on the road at 80 percent. A company driver paid on a W-2 cannot deduct unreimbursed job expenses at all, because miscellaneous itemized deductions have been suspended for tax years beginning after 2017. This page takes the rules from IRS Publication 463 (2025) and the current per diem notice.
First question: employee or self-employed?
Publication 463 puts it plainly for employees: the cost of using your car, and by extension other unreimbursed job expenses, "will no longer be allowed to be claimed as an unreimbursed employee travel expense as a miscellaneous itemized deduction due to the suspension of miscellaneous itemized deductions that are subject to the 2% floor under section 67(a). The suspension applies to tax years beginning after 2017." The 2025 edition gives no end date. The publication lists the exceptions that keep a deduction "in determining adjusted gross income": Armed Forces reservists, qualified performing artists and fee-basis state or local government officials. Truck drivers are not on that list.
So a W-2 company driver's route to tax relief is the employer: an accountable reimbursement plan, or a per diem paid by the carrier, is excluded from wages and does not need to be deducted. If your employer offers per diem pay, that is the deduction, taken before the paycheck.
An owner-operator, whether leased to a carrier or under their own authority, is self-employed and reports on Schedule C (Form 1040). Everything below applies to that return. The Schedule C instructions list business codes for trucking: 484110 for general freight, local; 484120 for general freight, long-distance; 484200 for specialized freight.
The deductions, by kind
| Expense | Deductible for an owner-operator? | Note |
|---|---|---|
| Fuel, DEF, oil | Yes, actual cost | Keep receipts or fuel card statements. IFTA reports are also the record of where fuel was bought and burned. |
| Repairs, maintenance, tires, parts | Yes | Repairs that keep the truck in its ordinary condition are expensed; improvements that add value or extend life are depreciated. |
| The truck and trailer | Depreciated, not expensed | Publication 946 governs. Section 179 and bonus depreciation can accelerate the write-off; the choice affects several years, so it belongs with a tax preparer. |
| Truck payment interest | Interest, yes; principal, no | Principal is recovered through depreciation. |
| Insurance: liability, cargo, physical damage, bobtail, occupational accident | Yes | Health insurance for yourself is a separate adjustment on Form 1040, not a Schedule C expense. |
| Licenses, permits, plates, UCR, Form 2290 heavy vehicle use tax, IFTA taxes paid | Yes | See the Form 2290, IFTA and UCR pages for the underlying filings. |
| Tolls, scale fees, parking, lumper fees | Yes | Unless reimbursed by the shipper or broker. |
| ELD subscription, load board, phone and data used for the business, dispatch software | Yes, business share | A phone used for both needs a reasonable split. |
| Meals away from home | Yes, at 80 percent | Actual cost or the standard meal allowance; see the next section. |
| Lodging away from home | Yes, actual cost | The special per diem for transportation workers covers meals and incidentals only; lodging must be actual. |
| Sleeper berth equipment, bedding, cooler, CB, work gloves, safety gear | Yes | Ordinary and necessary for the business. |
| Medical exam for the DOT card, drug testing consortium fees | Yes | Required to operate; business expenses, not medical deductions. |
| Association dues, accounting and legal fees, business bank fees | Yes | |
| Commuting between home and the yard, clothing usable off the job, fines and penalties | No | Traffic and overweight fines are never deductible. |
Meals: the 80 percent rule and the $80 per diem
Publication 463: "you can deduct only 50% of your business-related meal expenses, unless an exception applies. (If you are subject to the Department of Transportation's 'hours of service' limits, you can deduct 80% of your business-related meal expenses.)" The publication lists interstate truck operators among those subject to the hours-of-service limits. The 80 percent applies to meals "during or incident to any period subject to the Department of Transportation's hours of service limits", so a driver on a day off at home is back to ordinary rules.
There are two ways to measure the meals. Actual cost, with receipts. Or the standard meal allowance, which Publication 463 says "you can use whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses". For the transportation industry the IRS sets a single flat rate instead of the city-by-city federal rates: IRS Notice 2026-60 gives "$80 for any locality of travel in the continental United States (CONUS) and $86 for any locality of travel outside the continental United States (OCONUS)", for the period the notice covers. Multiply the days away from home by the rate, apply the 80 percent, and that is the meal deduction, with no receipts for the meals themselves but with a record of the days. The per diem calculator does the count, including the partial days at the start and end of a trip.
"Away from home" has a tax meaning: away from your tax home, which is your regular place of business, long enough to need sleep or rest. A local driver home every night has no per diem days; a regional driver out three nights has three full days and two partial days.
Records
Publication 463 devotes a chapter to recordkeeping, and the rule is simple: the deduction survives an audit if the record shows the amount, the date, the place and the business purpose, kept at or near the time. For the standard meal allowance the record is the days away and where you were, which the ELD logs already establish. For everything else, receipts or statements. Fuel card statements, IFTA reports, settlement sheets from a carrier (which list chargebacks as well as pay) and a business bank account do most of the work if they are kept separate from personal spending.
Paying as you go
Self-employment has no withholding. Income tax and self-employment tax on Schedule C profit are paid during the year with estimated tax payments on Form 1040-ES; underpaying brings a penalty even if the return is filed on time. Set aside a share of every settlement. Publication 505 is the IRS reference on estimated tax.
A worked example
Example. A leased owner-operator is away from home 240 days in the year. Meals by the standard allowance: 240 days at $80 is $19,200, of which 80 percent, $15,360, is deductible. Add fuel $58,000, maintenance and tires $12,000, insurance $9,500, permits and taxes $2,800, tolls and scales $1,900, ELD and phone $1,400, and depreciation on the truck as computed under Publication 946. Those go on Schedule C against the settlements received; the profit that remains is what income and self-employment tax are computed on. The same driver as a W-2 employee with the same out-of-pocket costs could deduct none of them, and would instead look for an employer-paid per diem.
Common mistakes
- A company driver claiming per diem on Schedule A. Suspended since tax years beginning after 2017.
- Taking 100 percent of meals. The limit is 80 percent for drivers under hours-of-service limits, 50 percent for everyone else.
- Using the per diem for lodging. The transportation rate covers meals and incidental expenses only.
- Expensing the truck in the year of purchase without checking the depreciation choices, or deducting the loan principal.
- Mixing personal and business accounts, which turns every deduction into an argument.
- Skipping estimated payments.
The rate figures on this page come from the notice in force when it was written; the IRS issues a new per diem notice each autumn. Nothing here is tax advice for a particular return; a preparer who works with drivers knows the depreciation and state questions this page leaves out.