Making Sense of Owner-Operator Expenses: Insights on tax-deductible expenses from CloudTrucks Drivers

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We are constantly analyzing the data we have to better understand the financial landscape faced by our owner-operators. We recently reviewed six months of transactions on our owner-operators’ CT Cash cards, and we uncovered some interesting insights that could impact how you manage finances for your trucking business and your next tax return.

Decoding Your Spend

Based on our owner-operators’ CT Cash card data, a whopping 85% of owner-operator expenses fall into categories that are typically tax-deductible. These include:

  • Fuel: The obvious giant among expenses, accounting for 66.1% of total spending.
  • Food: Meals and groceries (3.6%) combined with food and drink expenses (5.6%) account for 9.2% of total spend.
  • Professional Services: At 9.1%, this category covers essential business services such as tax preparation, accounting/ booking keeping, and even childcare services (when used in service of running a business).
  • Vehicle Services: Maintenance and repairs account for 7.6% of spend.

Other notable categories include insurance (3.5%) and bills & utilities (2.6%).

Non-deductible expenses include entertainment and cash withdrawals.

Based on our owner-operators’ CT Cash card data, a whopping 85% of owner-operator expenses fall into categories that are typically tax-deductible.

Navigating Tax Deductions

We first have to say that we are not tax experts. 

We do, however, know that tax laws are notoriously complex and not all expenses will qualify for a straight write-off. For instance, meals and groceries can be tricky. If you're bound by Hours of Service regulations, you can deduct 80% of your on-trip meal expenses. If not, you're limited to a 50% deduction. Understanding these nuances can help you plan better and potentially save on taxes. 

Consulting a tax professional that is familiar with trucking businesses will always be incredibly helpful in helping you determine the best tax strategies for your business.

If you are a CloudTrucks driver, remember that we have some friends at ATBS that can help.

A Closer Look at Our Data

It's important to note that our findings are based on transactions made by our customers exclusively with the CT Cash card. While many of our owner-operators use this card for all their business-related transactions, this data might not capture every expense. 

If you are an owner-operator, you should always keep comprehensive records to ensure no deductible expense is overlooked.

What Does This Mean For You?

For owner-operators, managing expenses isn't just about keeping your truck running; it's about strategic financial planning. Here are a few tips:

  1. Keep Detailed Records: This can't be overstated. Detailed tracking helps maximize your eligible tax write-offs.
  2. Understand Your Deductions: Knowing what you can and cannot deduct can make a significant difference in your taxable income. Consult professionals for help.
  3. Plan for Tax Time: Use insights like these to prepare for tax season, reducing surprises and stress.

We are committed to supporting our community of truck drivers and owner-operators with data-driven insights to help you thrive in a competitive industry – we hope these insights will help you do just that in this tax season and future ones. 

And if you are a CloudTrucks owner-operator, remember: 

  • Through our partnership with ATBS, you can access discounted tax-filing, bookkeeping, and back office support at a great discounted rate. Click here to fill out the sign-up form and get started, plus get access to their new app and client portal. 

You can access low-cost tax filing and tax-related advice through CloudCare. File your taxes for just $30 (federal + state) and get personalized assistance through the Tax Hotline. Access your CloudCare portal to take advantage of these perks and more.

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