What Are the Various Taxes Truck Operators Have to Pay?

What Are the Various Taxes Truck Operators Have to Pay?

Every truck operator knows that when it comes to taxes, the whole business becomes much more complicated! The trucking industry is unique in the eyes of the IRS, which means that there are many taxes that are different from the ones in all other industries.

With that in mind, we wanted to make this much easier for you by providing you the answer to this burning and complicated question. Let’s take a deeper look at all of the taxes you, as a truck operator, have to pay.

Things You Need to Know First

If you just turned from a regular employee into an owner-operator, you are now responsible for all of your taxes. Your employer handled most of the taxes you had before, but now, you have to pay all of them yourself.  

Furthermore, you have to make estimated tax payments at the end of every quarter. They are often 20-30% of your net income from the quarter. If you do this right every time, you will avoid unnecessary fees and penalties when Tax Day on the 15th of April comes. 

The Types of Taxes You Need to Know as a Truck Operator

  • HVUT Form 2290

HVUT Form 2290 is the most important tax you need to know. It’s a federal excise tax you need to pay annually for all motor vehicles that way over 55,000 pounds. 

You need to file this form if you have vehicles that weigh over 55,000 pounds that travel 5,000 miles or more annually through public highways in the U.S. If you own 25 or more such vehicles, you should pay your taxes electronically. That’s because the whole process becomes much easier and less time-consuming than filing on paper.

With Form 8849, you can claim refunds on most excise taxes that were reported through form 2290. 

  • Self-Employment Tax

This tax exists for covering your Social Security and Medicare taxes when you work for yourself. The rate for this tax is 15.3% (12.5% for social security and 2.9% for Medicare).

Once you figure out your adjusted gross income, you can deduct the employer portion of your self-employed tax. Also, if you file Form 1040 Schedule C, you may get the option to claim EITC, or the Earned Income Tax Credit. You can learn here if you are eligible for EITC

  • Federal Income Tax 

Federal income tax is paid as you go, which means that you need to pay the tax on any income you make during the year. You can pay this tax when you file your return.

  • State Income Tax

State income tax varies from state to state, and it represents the percentage of the money you pay to the state government. It’s in many ways similar to federal income tax.

Most states (36) have graduated tax rates that are similar to the ones the federal government has. However, eight states have a flat tax rate, and seven states don’t have income tax at all.

The Bottom Line

As you can see, there are several taxes you need to worry about, besides the ones everyone knows and pays. To avoid trouble with the IRS, it’s best to pay all of them on time and in the amount you’re required!

However, if you do end up in some trouble, you can always call Golden Tax Relief. We specialize in helping truckers deal with the IRS.

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