Tax Planning for Trucking Companies and Owner-Operators: Per Diem, Equipment Depreciation, and IFTA

The trucking industry presents one of the most favorable tax environments for business owners, yet many owner-operators leave significant deductions on the table. The combination of heavy equipment depreciation (trucks over 6,000 lbs GVW are exempt from luxury vehicle caps), the DOT per diem rate for transportation workers (80% deductible instead of 50%), and the full deductibility of fuel, maintenance, insurance, and road expenses creates a deduction profile that can shelter a large portion of gross income. Under IRC 274(n)(3), individuals subject to the Department of Transportation hours-of-service rules can deduct 80% of their meal expenses (compared to 50% for all other taxpayers), and they can use the federal per diem rate ($80/day in 2025 for the continental U.S.) instead of tracking individual meal receipts. For an owner-operator who’s on the road 300 nights per year, the per diem deduction alone is $19,200 ($80 x 300 x 80%). Combined with first-year depreciation on a new truck ($180,000+), fuel costs ($60,000-$80,000/year), and other operating expenses, the effective tax rate for a well-advised owner-operator is substantially lower than for comparable income in other industries.

How can owner-operators maximize their tax deductions?

Which owner-operator deductions are easy to get wrong?

Health insurance is one to keep separate. Premiums for you and your family go on the self-employed health insurance deduction, limited to your net earnings from trucking, and that deduction doesn’t reduce self-employment tax. It also isn’t allowed for any month you could join a subsidized plan through your own or your spouse’s employer.

• The transportation-industry per diem is $80 a day in the continental U.S. for travel from October 1, 2025 through September 30, 2026, and 80% of it is deductible for drivers under DOT hours-of-service rules.
• Driving your own car between home and a terminal that’s your regular place of work is commuting, which generally isn’t deductible unless your home is your principal place of business.
• A tractor unit for over-the-road use is 3-year property, which matters if you elect out of bonus depreciation.
• A multi-year truck insurance policy paid upfront is deducted one year at a time.

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.