Trucking & Taxes – October 2025

The One Big Beautiful Bill Act includes more than 400 pages dedicated to tax provisions. Let’s focus on the parts of the bill that impact truckers the most.

The bill, which President Donald Trump signed into law on July 4, contains a wide range of provisions that will affect nearly every type of taxpayer, including individuals, corporations, pass-through entities and tax-exempt organizations.

Here is a summary of the most impactful changes for truckers:

1. Previous cuts made permanent. The 2017 Trump Tax Cuts were set to expire at the end of 2025. Now, the seven tax rates (10%, 12%, 22%, 24%, 32%, 35% and 37%) established in 2017 will remain intact.
2. Standard deduction increased. For 2025, the standard deduction increased to $15,750 for singles, $23,625 for heads of households and $31,500 for joint filers. These amounts will continue to be adjusted annually for inflation.
3. Senior deduction. The bill added a deduction for individuals who have reached age 65 before the end of the tax year. The deduction amount is $6,000 per individual. The senior deduction begins to phase out when the taxpayer’s modified adjusted gross income exceeds $75,000 ($150,000 in the case of a joint return). The deduction, which is allowed for the 2025-2028 tax years, is available regardless of whether you itemize or take the standard deduction.
4. Trump accounts. The One Big Beautiful Bill Act creates Trump accounts, a new type of tax-exempt savings account administered by banks and other financial institutions. These accounts provide an opportunity to build tax-deferred savings for children that can be used for education or other qualified purposes, incentivizing saving at a young age.

Starting in 2026, parents of any child under age 8 may open a Trump account for their child. Aggregate contributions are limited to $5,000 annually. Beginning at age 18, account holders will be able to access up to 50% of funds for limited purposes, including higher education. At age 25, the 50% limitation will be lifted. And at age 30, account holders will have access to their full balance for any purpose. Under this pilot program for U.S. citizens born between Jan. 1, 2024, and Dec. 31, 2028, the federal government will contribute $1,000 per child into every eligible account.

5. Child tax credit. The bill permanently increases the child tax credit to $2,200 per child beginning in 2025 and indexes it for inflation.
6. State and local tax deductions. The state and local tax deduction for itemizers increases to $40,000 but phases down to $10,000 for taxpayers with over $500,000 of adjusted gross income.
7. Charitable deduction for non-itemizers. Beginning in 2026, this deduction from gross income (above-the-line) can be $1,000 for single filers or $2,000 for joint filers. This means that you do not have to itemize to take this deduction.
8. Charitable contributions for itemizers. The deduction for charitable contributions for itemizers is now limited to charitable contributions in excess of 0.5% of modified adjusted gross income. The rule will be effective for taxable years beginning after this Dec. 31.
9. Qualified business income deduction made permanent (Sec 199A Deduction). The 20% deduction for pass-through income stays for good. This deduction allows owners of pass-through businesses, including sole proprietorships, partnerships, LLCs and S corporations, to deduct up to 20% of their qualified business income (QBI). For owner-operators, this means getting a deduction on the net income earned through their trucking business. It will be deducted on their personal return, not requiring them to itemize.

Of course, this is subject to limitations – but those limitations are also expanded. The bill expands the phase-in thresholds from $50,000 to $75,000 for individual filers and from $100,000 to $150,000 for joint filers. For these businesses, the deduction is reduced when taxable income falls within the phase-in range and is eliminated when taxable income exceeds the range.

The One Big Beautiful Bill Act also adds an inflation-adjusted minimum QBI deduction of $400, beginning in 2025. The $400 minimum deduction is available for taxpayers who have at least $1,000 of QBI from one or more active businesses in which they materially participate.

10. 100% bonus depreciation extended. The bill provides businesses the ability to elect 100% bonus depreciation under Section 168(k) for qualified property (tractor, trailers, equipment and other short-lived assets), which must be acquired and placed in service after Jan. 19, 2025. This means a business is allowed to immediately deduct the full cost of qualified property in the year it is placed in service, rather than depreciating the property’s cost over time.

The biggest disadvantage of using 100% bonus depreciation is losing deductions that could have been used in the future. Depending on its tax situation and tax bracket, in a year a company does not buy any fixed assets, its taxes could end up much higher without the use of depreciation.

11. Section 179 expensing expanded. The new law allows higher limits for first-year upfront deductions on business purchases. The bill makes Section 179 expensing permanent and doubles the maximum deduction to $2.5 million with a phase-out threshold of $4 million in equipment purchases. This applies only to property placed in service in taxable years beginning after Dec. 31, 2024.
12. Information-reporting threshold change. The threshold to issue 1099NEC for payments has changed from $600 to $2,000 and adjusts for inflation. This will reduce administrative overhead and make compliance simpler for truckers. However, owner-operators should still get a W-9 from all contractors paid in their business.
13. Estate and gift tax. Regarding this tax, the law institutes a permanent (and inflation-adjusted) exemption level of $15 million beginning in 2026. For anyone building a business or legacy to pass on to their children, this estate deduction will allow them to pass the business to their heirs without taxes if the estate is below the exemption level.

The One Big Beautiful Bill Act has more new and impactful tax law changes than we have seen in years. These changes bring opportunities to strengthen your future tax and estate plans. However, they also can create new pitfalls and thresholds to avoid.

This is only a brief analysis of the bill; it contains many other impactful changes that could help your family and business. For more information, check out our podcasts at TaxTalk4U.com. LL

This is a good time to talk with your tax expert about your situation and how it affects both your family and business. If you need an expert in trucker taxes and bookkeeping, visit TruckerTaxTools.com or call 877-966-2477.