Truck drivers face unique challenges when it comes to taxes, especially owner-operators. From tracking mileage and expenses to filing on time to avoiding tax debt, IRS issues are common for truckers.
A tax attorney can help. These tax experts know each form of tax relief available to you, how to prepare your tax returns effectively, and the best ways to handle business tax problems. When in doubt, talk to the IRS tax attorney at Seattle Legal Services for guidance on protecting your income, assets, and livelihood.
Key takeaways
- Truck drivers have unique tax obligations, especially if you’re an owner-operator and have to pay self-employment tax.
- Truckers may get into trouble with the IRS if they have back taxes, unfiled tax returns, or unpaid tax penalties. This could eventually lead to asset seizure.
- Forms of tax relief for owner-operators include installment agreements, offers in compromise, currently not collectible (CNC) status, and stopping tax levies.
- A tax attorney can be crucial depending on your tax problem. Attorneys can negotiate with the IRS for you, represent you in court, and help you establish tax planning strategies.
- Don’t put your business assets at risk by trying to DIY your tax problems.
Unique Tax Challenges for Truck Drivers
While there are pros and cons to every profession, truck drivers have to contend with a unique set of conditions, like long hours and lots of time away from home. Taxes can also be hard to manage, especially when you’re on the road all the time and may not always keep detailed documentation. Here are a few reasons taxes can be more challenging for truck drivers:
No Recordkeeping System
When you’re constantly on the road, you may not have the time or resources to keep up-to-date, accurate records all year long. This can get in the way of accurate and timely tax filings, but an experienced attorney can help you file back taxes even if you don’t have receipts or bookkeeping records.
High Expenses
It’s not cheap to be a truck driver. You have to worry about expenses that continue to rise each year, like vehicle insurance, truck repairs, and fuel. If you have an inconsistent income because of shifting hours and clients, it can be hard to budget effectively. And if you don’t have a handle on your expenses, completing your tax return with correct deductions is much more difficult. If you don’t report all of your expenses, you risk facing unnecessarily high tax liabilities.
Self-Employment Tax
Earning self-employment income means you’ll face self-employment tax, which applies to sole proprietors, contractors, LLC members, and partners. The rate for 2025 is 15.3%, which includes 12.4% for social security and 2.9% for Medicare. This tax is added to the income tax you owe based on your tax bracket.
No Structured Payroll Withholding
With regular W-2 jobs, your employer withholds taxes from your paychecks to send to the IRS. But if you run your own trucking business, you may not have that kind of structure. This could lead to missed quarterly estimated tax payments or underpayment.
Common IRS Problems for Truckers
These tax challenges can quickly lead to problems with the IRS. Some are minor and can be rectified quickly, while others can get you into deep water.
- Years of unfiled tax returns: If you’re unable to keep accurate records, you may not have the documentation required to submit your tax return, and you may not be aware of passing deadlines.
- Substitute for Returns (SFRs): The IRS may file an SFR on your behalf if you fail to file, and it has income information about you from third parties. The problem with SFRs is that the IRS won’t account for any deductions or credits you qualify for, so your tax balance will be higher.
- Tax penalties: If you don’t file or pay your taxes on time, the penalties will start to come in from the IRS. This means if you miss a quarterly estimated payment, you’ll get hit with a fee plus interest.
- Other IRS collection actions: If you’re really behind on tax return filings and/or you owe a lot in back taxes, the IRS could start to get more aggressive with its collection tactics. If you ignore notices and penalties, you could have to deal with IRS levies in the form of asset seizure or wage garnishment. They may even be able to go after business assets, including trucks and trailers.
It’s easy to get behind on taxes, no matter your profession. For truck drivers, it’s especially hard to stay on top of IRS and state obligations, since taxes can be more complex. Remember that a truck tax relief attorney can be the solution to your tax problems.
Forms of Truck Driver Tax Relief
You may have heard about truck driver tax relief options when you have lots of tax debt. However, understand that forms of relief don’t always get rid of your tax debt completely. They typically allow you to work out a plan with the IRS to get your debt paid off or delay collection. Here are a few forms of tax relief for owner-operators that may apply to your situation:
Installment Agreement
An installment agreement is a common option when you can’t pay your balance in full when it’s due. The IRS will allow you to set up a payment plan to pay off your bill over time via monthly installments. These plans are easy to apply for online, and you’ll be considered in good standing with the IRS as long as you don’t default on the agreement.
Offer in Compromise
This arrangement allows you to settle your debt for less with the IRS, though it’s harder to get an approval than a payment plan. An offer in compromise request requires that you show the IRS why your financial situation doesn’t allow you to pay your full balance.
Currently Not Collectible (CNC) Status
If you’re experiencing financial hardship, you could ask the IRS to put your account in CNC status. This pauses the agency’s collection efforts until your situation improves. The IRS will usually ask you to provide details about your finances.
Stopping Tax Levies
If you’ve received many IRS notices and have failed to act, you could be at the levy stage. The IRS could seize your assets to cover your tax bill unless you act immediately. A tax attorney can help you stop a levy by responding before it takes effect, ensuring your property is protected.
How Tax Relief Attorneys Help Truck Drivers
You have several options when it comes to tax help, but you need to choose carefully.
A CPA can help you prepare your tax returns, but they aren’t always experienced with IRS resolution. Some tax preparation firms don’t have the authority to negotiate with the IRS – they can help with returns, but not with audits or setting up payments. Some companies also mislead clients into thinking their tax debt can be forgiven, when really they can only offer the same tax resolution options that the IRS allows.
A tax attorney can act on your behalf no matter your tax issue. They can represent you in court, if it comes to that, or talk to the IRS to try to set up a deal to get your taxes paid off.
Here are a few other ways tax attorneys can help truckers:
- Identify missed deductions and help you claim them, including depreciation, per diem, and repairs.
- File accurate tax returns to avoid SFRs with tax assessments that are too high.
- Negotiate installment agreements with payments you can afford.
- Request CNC status or an offer in compromise when you qualify.
- Protect you from IRS asset seizure.
- Help you understand your relief options as a trucker and which path is best for you.
- Set up better tax practices so you don’t miss deadlines and submit accurate information.
- Rebuild missing records for deducting expenses and reporting income.
Tax attorneys understand the unique tax problems you may face as a truck driver. Get on top of back taxes or unfiled returns with the help of an experienced attorney.
How Attorneys Protect Your Business Assets
If you’re an owner-operator, you have more at stake than other truck drivers who work as employees of a bigger company. You’re responsible for ensuring equipment is functioning and available to conduct business. When you’re dealing with potential IRS levies, this equipment could be at risk of being seized.
Attorneys understand IRS processes and can identify where your case stands. They’ll help you act quickly once you receive a Notice of Intent to Levy from the IRS, whether applying for a relief option, contesting an amount, or contacting the IRS. Tax attorneys will ensure your property isn’t at risk, so you don’t jeopardize the health of your business because of tax problems.
When You Shouldn’t DIY Your Tax Debt
Some truckers can take care of their tax debt without getting legal help. This may be true if you missed one tax return filing or are late with a payment, and you can afford the payment now to avoid further IRS trouble. You may also understand how to set up a simple installment agreement on your own.
However, sometimes drivers may set up a payment plan they can’t realistically afford with their income. This could lead to a default on the agreement and subsequent IRS collection actions.
If you can’t afford your tax bill and your debt keeps increasing, it’s time to work with a tax attorney. You don’t want to risk an even bigger balance and potential IRS action that could impact your trucking business. Warning signs include receiving repeated IRS notices in the mail, having years of unfiled tax returns, or seeing a large balance of back taxes.
Handling your tax issues on your own could also mean you miss ways your assets are exposed to seizure, or ways to qualify for tax breaks. Attorneys will ensure you’ve covered all your bases and submit accurate information every time.
Advantages of Working with Seattle Legal Services
As a truck driver, you have enough on your plate keeping revenue flowing and your business running. When it comes to tax problems, work with the tax attorney at Seattle Legal Services to get peace of mind that you’re in good standing with the IRS.
Our firm is familiar with tax deductions you can take to maximize your tax savings, and we provide support when you’re purchasing new equipment or applying for financing. We’ll also help you with tax planning strategies customized to the trucking industry. We have experience assisting truck drivers and directly negotiating with the IRS for better outcomes.
Whatever your tax issue may be, the earlier you contact an attorney, the more options you’ll have for resolution. Talk to us about reducing tax penalties and avoiding IRS collection escalation.
Set up a free consultation with our tax attorney to get started now.
FAQs About Trucker Tax Relief
When Should a Trucker Contact a Tax Attorney?
Not all situations may warrant a tax attorney. But if you’re a trucker, especially an owner-operator, work with a tax attorney if you have back taxes, are facing IRS levies, have received repeated IRS notices, or need to understand tax deductions.
What Tax Relief Can I Get If I Own My Truck?
The IRS allows truckers to claim depreciation and other vehicle-related expenses if they own their truck. A tax attorney can help you calculate your deductions and take advantage of tax breaks you may not be aware of.
What Are Common Tax Problems for Owner-Operators?
Missed quarterly tax payments, poor recordkeeping, missed deductions, and a lack of payroll organization can all be problems for truckers who are owner-operators. These problems can lead to IRS issues like back taxes, penalties, and more serious collection actions.
What Expenses Can Truck Drivers Deduct from Taxes?
As a truck driver, you may be able to deduct meals, travel costs (like hotels and parking), equipment, insurance, and vehicle expenses, such as depreciation, gas, registration, and repairs.
Sources:
https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-defined
https://irstaxtrouble.com/irs-collections/truck-driver-tax-problems/
https://www.simpletrucktax.com/blog/truck-tax-troubles–common-issues-and-solutions-for-truckers