Trucking & Taxes – December 2025/January 2026
Tax planning should not be something you put off until April tax filing. Instead, you should take a proactive approach and find ways to save money year-round.
However, it is particularly important to get your tax plans in order before the end of the year, and now is the time.
Where to start?
As an owner-operator, you should have monthly financial statements that include an income statement (profit and loss statement) and a balance sheet. This will help you analyze how your business is doing compared to the previous year.
How profitable was 2025? Did you buy new assets (equipment)? Did you miss any expenses?
This comparison will give you a good idea whether something is missing or under-reported. It can also serve as a guide for making sure you have all income and expenses reported.
Ways to lower your taxable income
Buy new equipment: Personally, I hate the suggestion of buying new equipment just to save on taxes. However, it makes sense to look at your financial situation and determine whether this is the right time to buy a new tractor or trailer. If there is a need – a true business need – then this could be the right time. If net income and taxes are up or if your tractor or trailer is continually being repaired, then it just might be the time as well.
Business expenditures are counted as being made in the year you purchase them, even if you use a credit card or other deferred payment plan and do not pay for them until the following year. For example, if you buy a trailer or tractor in December, you can start depreciating it when filing your next tax return the following year. You may even be able to take bonus depreciation or a Section 179 deduction and expense the entire cost of the asset this year.
Pay your children: If you are a parent, you can employ your child to work for your business. Children generally pay less in taxes than you would, because they are in a lower bracket. They then can use this money for anything from clothes to sports to whatever else you currently buy for them.
Turn charitable contributions into business expenses: Charitable donations are not deductible on Schedule C, and with the high standard deduction, many charitable contributions are not deductible at all. So, by categorizing the money you give to charity as a business expense – like advertising – you get a greater tax benefit.
Retirement contributions: We have all heard that when you contribute early and often to retirement, you can retire rich. Many truckers have not even started contributing, so now is the time to start and stay consistent. Even a small monthly amount is better than nothing. As a business owner, you can fund your own retirement plan.
While contributions to typical IRAs are limited, you can contribute significantly more to a retirement account by opening a SEP IRA or even a solo 401(k). There is no company size requirement for either plan, and contributions are tax-deferred. So, you will not pay federal income tax until you make a withdrawal.
Track all business mileage for your personal vehicle: Tracking your mileage for business activity in your personal vehicle may seem small. But in taxes, every deduction helps. You need to count every trip to the store, repair shop, post office or to meet a client – because all those miles add up. Make sure you are keeping a log of all mileage as well.
Tax changes
There were loads of new provisions that affect your taxes for 2025 in the One Big Beautiful Bill Act. This includes adjustments to income tax brackets, deductions and credits, requiring an evaluation of strategies before the Dec. 31 deadline.
Here are just a few things to consider
Do you qualify for the increased Child Tax Credit? The maximum increased to $2,200 per eligible child.
State and local tax (SALT) deduction: The cap on the SALT deduction has been temporarily raised to $40,000 ($20,000 for married filing separately) for taxpayers with a modified adjusted gross income up to $500,000.
Deduction for seniors: For 2025 through 2028, taxpayers age 65 and older can claim an additional deduction of up to $6,000. This bonus deduction phases out at higher incomes.
The bottom line
It is best to get with your tax preparer – especially one who knows trucking taxes, like TruckerTaxTools.com – to determine what your current liability would be for 2025.
Handling taxes as a self-employed owner-operator comes with its challenges, but it also provides incredibly unique opportunities to save. By planning ahead, being organized and using even just a few of the tips above, you can maximize your deductions, lower your taxable income and make the tax process less taxing.
Using some of these ideas and a proactive approach, you can make the most of the financial benefits that come with being an owner-operator. The right preparation can help you save money on taxes and approach tax time with confidence. LL