Tax Planning for Trucking and Transportation Companies: Per Diem, IFTA, Equipment Depreciation, and Entity Structure

By Yarik Yarosh, CPA ·September 5, 2026 ·5 min read

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

Trucking is one of the most tax-advantaged industries in the country because of the combination of accelerated depreciation on heavy equipment, the per diem meal deduction for drivers, and the relatively straightforward path to S-Corp payroll tax savings. Under IRC 179 and the restored 100% bonus depreciation provisions, a trucking company can deduct the full purchase price of a Class 8 truck, trailer, or other heavy equipment in the year it’s placed in service. Unlike passenger automobiles, vehicles with a gross vehicle weight rating (GVWR) over 6,000 lbs aren’t subject to the IRC 280F luxury automobile limits, so there’s no cap on the Year 1 deduction. For owner-operators, the per diem deduction under IRC 274(n) allows a flat daily rate for meals while away from the tax home overnight, which eliminates the need to keep individual meal receipts and can produce $15,000-$20,000 in deductions per year for long-haul drivers.

✓Key takeaway

Trucking equipment depreciation:

Equipment	Cost Range	MACRS Life	Year 1 Deduction
Class 8 tractor (semi-truck)	$150,000-$200,000	5 years	100% (full cost)
Dry van trailer	$40,000-$60,000	5 years	100%
Refrigerated (reefer) trailer	$60,000-$90,000	5 years	100%
Flatbed trailer	$35,000-$55,000	5 years	100%
Pickup truck (over 6,000 lbs)	$50,000-$80,000	5 years	100%
Box truck / straight truck	$60,000-$120,000	5 years	100%
Shop / maintenance building	$200,000+	39 years	Straight-line only
Yard improvements (paving, fencing)	Varies	15 years	100% bonus

Per diem meal deduction (DOT drivers):

Item	Details
2024 DOT per diem rate	$69/day (CONUS)
Who qualifies	Drivers subject to DOT hours-of-service regulations
Deductible percentage	80% (DOT-regulated, vs. 50% for other businesses)
Net deduction per day	$69 x 80% = $55.20
Annual deduction (280 days on road)	$15,456
Tax savings (37% bracket)	$5,719
Record keeping	Days away from tax home; no individual meal receipts needed

IFTA basics:

Item	Details
Who must file	Motor carriers operating qualified motor vehicles in 2+ IFTA jurisdictions
Qualified motor vehicle	2 axles + GVWR over 26,000 lbs, or 3+ axles regardless of weight, or combination over 26,000 lbs
Filing frequency	Quarterly
How it works	Report total fuel purchased and miles driven in each state; IFTA redistributes fuel taxes based on where miles were driven
Net effect	Pay fuel tax to states where you drove but didn’t buy fuel; receive credits from states where you bought fuel but drove fewer miles

How do trucking companies minimize taxes?

Hypothetical example

Round numbers. An owner-operator with one Class 8 truck has the following financials:

Item	Amount
Gross revenue (freight)	$250,000
Fuel	($60,000)
Insurance (truck + cargo + liability)	($20,000)
Truck payment (interest portion)	($8,000)
Maintenance and repairs	($15,000)
Tires	($5,000)
Per diem meals (280 days x $69 x 80%)	($15,456)
Tolls, scales, permits	($6,000)
Cell phone, ELD, dispatch software	($3,000)
Other expenses	($7,544)
Net income (before depreciation)	$110,000
Truck depreciation (100% bonus on $180,000 purchase)	($180,000)
Net income (after depreciation)	($70,000) loss

The $70,000 loss carries forward (or back, if elected) as a net operating loss (NOL). In a year without a truck purchase, the net income would be $110,000.

Entity structure comparison (steady-state year, $110,000 net income):

Structure	SE/Payroll Tax	Income Tax	Total
Sole proprietorship	$15,583	$40,700	$56,283
S-Corp ($55,000 salary)	$8,415	$40,700	$49,115
Annual savings			$7,168

Fleet operator (5 trucks, 5 drivers):

Item	Amount
Gross revenue	$1,200,000
Driver wages (5 x $65,000)	($325,000)
Payroll taxes on driver wages	($24,875)
Fuel (5 trucks)	($300,000)
Insurance	($80,000)
Maintenance	($60,000)
Other operating expenses	($110,125)
Net income	$300,000

S-Corp savings on $300,000 (owner salary $100,000):

Structure	Payroll Tax	Income Tax	Total
Sole prop	$32,000	$111,000	$143,000
S-Corp ($100K salary)	$15,300	$111,000	$126,300
Savings			$16,700

Equipment leasing entity strategy:

Entity	Purpose	Benefit
Operating LLC (S-Corp)	Hauls freight; hires drivers; holds permits	Operating liabilities stay here
Equipment LLC	Owns trucks and trailers; leases to Operating LLC at FMV	Trucks protected from operating lawsuits; lease payments are deductible to Operating LLC
Real property LLC	Owns shop/yard	Real estate protected from operating risks

Heavy Vehicle Use Tax (HVUT, Form 2290):

Item	Details
Who pays	Trucks with taxable gross weight of 55,000+ lbs
Annual tax	$100 (55,000 lbs) to $550 (75,000+ lbs)
Due date	August 31 for tax year beginning July 1
Form	IRS Form 2290
Stamped Schedule 1	Required for vehicle registration

Common trucking deductions often missed:

Deduction	Details
Lumper fees	Deductible when paid at loading/unloading
Truck washes	Deductible business expense
CB radio and accessories	Deductible
Sleep apnea testing and equipment	Deductible (DOT-required medical)
DOT physical	Deductible
CDL renewal and training	Deductible
Deadhead miles	Fuel and depreciation still deductible on empty miles
Truck GPS and dashcam	Deductible
Broker/dispatch fees	Deductible
Parking fees (truck stops)	Deductible

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

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Cite this page

Yarik Yarosh, CPA. "Tax Planning for Trucking and Transportation Companies: Per Diem, IFTA, Equipment Depreciation, and Entity Structure." Blue Cloud CPA, September 5, 2026. https://bluecloudcpa.com/guides/small-business-tax-planning-trucking-transportation-per-diem-ifta

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