January is now a memory and 2016 is well underway. This means it’s the time of year that we find the conversation switching from new year’s resolutions to tax returns and deductions. Oh yes, fleet managers and truck drivers, it’ll soon be time to get those taxes filed for 2015!
So, here’s a question – are you going to get your maximum tax refund this year? Better yet, are you aware of all the tax deductions available to truck drivers/CDL holders? Odds are, there are a few you’re overlooking…especially if you opt for itemized deductions. For example – did you know you could write off air fresheners and paper towels? Before we get into many other items that can be written off, let’s take a look at the difference between itemized and standard tax deductions for truck drivers.
Standard & Itemized Tax Deductions
You can either claim the standard deduction or itemize your deductions — whichever lowers your tax the most.
Standard deductions are a base amount of income used to reduce your taxable income depending on your filing status, age, whether you’re disabled or claimed as a dependent on someone else’s taxes. Standard deductions are generally much more hassle-free than itemized deductions, but may not give you the biggest tax break.
An itemized deduction is an eligible expense that individual taxpayers in the United States can report on their federal income tax returns in order to decrease their taxable income.After computing their adjusted gross income (AGI), taxpayers can itemize their deductions (from a list of allowable items) and subtract those itemized deductions (and any applicable personal exemption deductions) from their AGI amount to arrive at their taxable income amount.
Maximizing Your Tax Deductions
Much like planning a route or managing a fleet, itemized tax deductions take some organization and are best done with a really good system in place to keep track of everything. The best place to start, of course, is being aware of what all can be considered an itemized deduction for truck drivers.
The folks over at CDLLife.com have put together an infographic to illustrate some of the truck driver tax deductions that are often overlooked. While things such as writing off your atlas or duct tape may seem small, these are tools used for the job that can add up when doing an itemized tax deduction. To help you figure out the best way to file your taxes, take a look at over 100 tax deductions you might be missing.
While some of these items may seem obvious, others not so much. Over the course of a year nearly all of these items will be used/purchased by a CDL truck driver (some multiple times) and keeping track of receipts could make a big difference as tax time rolls around. This handy little guide can be used as a quick reminder; accompanied with a receipt pocket organizer to keep everything in order.
For more industry news on everything from truck driver health to technology and taxes, check out the news section of our website!