Tax Planning for Trucking Owner-Operators: Per Diem Deductions, IFTA Fuel Tax, Equipment Depreciation, and Lease-Purchase Agreements

By Yarik Yarosh, CPA ·September 5, 2026 ·Updated September 23, 2026 ·8 min read

Written by Yarik Yarosh, CPA (US & Canada) September 5, 2026 · FL CPA license AC61704 · CPA Ontario

Owner-operators in the trucking industry are independent businesses operating a single high-value asset (the truck) with predictable, well-documented expenses. The tax planning framework for owner-operators is built around three pillars: (1) the per diem deduction for meals while away from the tax home under IRC 162(a)(2), which is available at a standard rate without receipts; (2) depreciation of the truck and trailer, which under 100% bonus depreciation allows the full cost to be deducted in Year 1; and (3) the QBI deduction under IRC 199A, because trucking isn’t an SSTB (it is a transportation service, not consulting or professional services). The combination of these three deductions, plus the ordinary operating expenses (fuel, maintenance, insurance, tolls, permits), means that many owner-operators pay an effective tax rate significantly below their marginal bracket.

✓Key takeaway

Owner-operator deduction priorities:

Priority	Deduction	Annual Impact
1	Truck depreciation (100% bonus on new/used)	$150,000-$200,000 (Year 1)
2	Fuel	$50,000-$80,000
3	Per diem (meals while away from tax home)	$12,000-$20,000
4	Truck payment interest	$5,000-$15,000
5	Insurance (physical damage, liability, cargo, bobtail)	$10,000-$20,000
6	Maintenance and repairs	$10,000-$25,000
7	QBI deduction (20% of net income, non-SSTB)	$10,000-$50,000
8	S-Corp payroll tax savings	$5,000-$15,000

Per diem rates (2025):

Location	Federal Per Diem (M&IE)	Owner-Operator Deductible (80%)
Continental U.S. (CONUS)	$80/day	$64.00/day
Outside the continental U.S. (OCONUS)	$86/day	$68.80/day
Partial days (departure/return)	75% of applicable rate	80% of 75%
Canada	IRS-set rate	80% of rate

Note: The 80% limitation for transportation workers (IRC 274(n)(3)) is more favorable than the 50% meal limitation that applies to most businesses. This is because transportation workers are subject to DOT hours-of-service regulations.

How should trucking owner-operators minimize taxes?

Hypothetical example

Round numbers. For current guidance, see International Fuel Tax Agreement. An owner-operator hauls freight leased to a carrier, earning $250,000 in gross revenue (1099 income).

Income and expense summary:

Item	Amount
Gross freight revenue (1099 from carrier)	$250,000
Fuel	($65,000)
Truck payment (principal + interest, $2,500/month)	($30,000)
Of which: interest portion	($8,000) deductible
Of which: principal portion	($22,000) not deductible (but see depreciation)
Insurance (physical damage + liability + cargo)	($15,000)
Maintenance and repairs	($12,000)
Tires	($4,000)
Tolls	($3,000)
Permits and licensing (IFTA, IRP, UCR, HVUT)	($3,500)
Cell phone (80% business)	($960)
Lumper fees	($2,000)
Scale fees	($500)
Truck washes	($1,500)
Parking	($2,000)
ELD/GPS subscription	($1,200)
Factoring fees (if using a factoring company)	($5,000)
Association dues (OOIDA, etc.)	($500)
Per diem (280 days x $64.00)	($17,920)
Total deductible expenses	($142,080)

Note: The truck payment principal ($22,000) isn’t listed as an expense because it is a capital expenditure. Instead, the truck is depreciated:

Truck depreciation:

Item	Amount
Truck cost (used Freightliner, purchased 2025)	$120,000
100% bonus depreciation (Year 1)	$120,000
Net depreciation deduction (Year 1)	$120,000

Item	Amount
Gross revenue	$250,000
Operating expenses (excluding principal, including interest)	($124,160)
Per diem	($17,920)
Depreciation (bonus, Year 1)	($120,000)
Net income (loss)	($12,080)

In Year 1 (purchase year), the owner-operator has a tax loss because of the bonus depreciation. This loss can offset other income (spouse’s W-2, etc.) if the owner materially participates.

Year 2 (no truck purchase, steady-state operations):

Item	Amount
Gross revenue	$250,000
Operating expenses	($124,160)
Per diem	($17,920)
Depreciation	$0 (fully depreciated in Year 1)
Net income	$107,920
SE tax (15.3% on 92.35%)	$15,249

S-Corp structure (Year 2 and beyond):

Item	Schedule C	S-Corp
Net income	$107,920	$107,920
Owner salary	N/A	$55,000
SE tax	$15,249	N/A
Employer FICA	N/A	$4,208
Employee FICA	N/A	$4,208
Total payroll/SE tax	$15,249	$8,416
Savings		$6,833
QBI deduction (20%, non-SSTB)	$21,584	$21,584
QBI tax savings (24%)	$5,180	$5,180
Total annual tax savings (S-Corp + QBI)		$12,013

Lease-purchase agreement trap:

Many carriers offer lease-purchase programs where the driver makes weekly payments toward eventual ownership of the truck. The tax treatment depends on whether the agreement is a true lease or a purchase:

Agreement Type	Tax Treatment	Deduction
True lease (operating lease)	Weekly payments are rent (deductible operating expense)	Full payment deductible when paid
Lease-purchase (conditional sale)	Weekly payments are split: interest (deductible) + principal (not deductible, capitalize)	Only interest is deductible; truck is depreciated
Walk-away clause (no obligation to purchase)	More likely a true lease	Full payment deductible
Title transfers at end	Purchase agreement	Capitalize and depreciate

If the agreement is really a purchase, the owner-operator must capitalize the truck cost and depreciate it (bonus depreciation available). Many owner-operators incorrectly deduct the full lease-purchase payment as “rent,” which understates their income and can trigger penalties on audit.

IFTA fuel tax:

Item	Details
What it covers	Motor fuel taxes for interstate trucking
Filing frequency	Quarterly
Calculation	Miles driven in each state x that state’s fuel tax rate, minus fuel tax already paid at the pump in each state
Deductible?	Yes, the net tax paid with the return (fuel tax paid at the pump is usually already part of your fuel cost, so don’t deduct it twice)
Record keeping	Must track miles per state and gallons purchased per state

Heavy Highway Vehicle Use Tax (HVUT, Form 2290):

Item	Details
Applies to	Vehicles with taxable gross weight of 55,000 lbs or more
Annual tax	$100-$550 depending on weight (most Class 8 tractors: $550)
Due date	August 31 for tax year beginning July 1
Deductible?	Yes

Common overlooked deductions:

Deduction	Notes
Deadhead (empty) miles	Fuel and per diem still deductible on repositioning
DOT physical exam	Required medical exam, deductible
CDL renewal and endorsement fees
Drug testing (DOT required)
Safety gear (steel-toed boots, gloves, reflective vest)
CB radio and dash cam
Sleeping bag, bedding (sleeper berth)
Shower fees (truck stops)
Laundry on the road
Maps, road atlases, GPS device

Retirement planning for owner-operators:

Plan	Contribution	Notes
SEP-IRA	20% of net SE income, up to $70,000	Simple; no employee matching required
Solo 401(k)	$23,500 + employer contribution of up to 20% of net SE income, up to $70,000 total	Higher contribution at lower income levels
Roth IRA	$7,000 ($8,000 if 50+)	After-tax; income limits apply

Illustrative numbers only, not a real client and not advice for your facts.

What per diem and road tax items do owner-operators miss?

The per diem rate itself is the first thing to check. For travel from October 1, 2025 through September 30, 2026, the special transportation-industry meals and incidental rate is $80 a day in the continental U.S. and $86 outside it, the same as the year before. At the 80% limit for drivers under DOT hours-of-service rules, $80 works out to $64 a day.

Fuel taxes paid at the pump are usually part of the fuel cost, so they’re deducted with the fuel and shouldn’t be claimed again as a separate tax.
The heavy vehicle use tax and other excise taxes that are ordinary and necessary are deductible.
Rates for travel on or after October 1, 2026 are set separately, so check the new figure before using it for the last quarter of 2026.
Form 2290 Heavy Highway Vehicle Use Tax: Filing Rules, Weight Thresholds, and Deadlines

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Cite this page

Yarik Yarosh, CPA. "Tax Planning for Trucking Owner-Operators: Per Diem Deductions, IFTA Fuel Tax, Equipment Depreciation, and Lease-Purchase Agreements." Blue Cloud CPA, September 5, 2026, updated September 23, 2026. https://bluecloudcpa.com/guides/small-business-tax-planning-trucking-owner-operators-per-diem-ifta

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

Tax Planning for Trucking Owner-Operators: Per Diem Deductions, IFTA Fuel Tax, Equipment Depreciation, and Lease-Purchase Agreements

How should trucking owner-operators minimize taxes?

What per diem and road tax items do owner-operators miss?

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