OTR Trucking Deductions

Lease-to-own agreements for business equipment look simple on the surface, but the IRS does not always treat them the way the contract label suggests. Depending on how the deal is structured, your payments may be fully deductible as rent - or they may not be deductible at all, with the tax benefit coming instead through depreciation. Recent legislation restored 100% bonus depreciation for equipment acquired after January 19, 2025, but the date that matters is your contract date, not the day the equipment arrives. Before you sign anything, it pays to understand exactly what you are getting into.

Over-the-road truckers subject to Department of Transportation hours-of-service rules get a more favorable meal deduction than most taxpayers. Instead of tracking actual meal costs, they can use a per diem rate set by the IRS, and the deductible percentage is higher than the standard 50% limit that applies to most business meals. The rules differ depending on how the trucker is set up - Schedule C sole proprietor, W-2 employee, or owner-operator running under an S corporation - and that structure affects both how the deduction is claimed and what benefit it actually delivers.