For fleet owners, managing operational expenses is an ongoing challenge. Every penny counts, from fuel and maintenance to driver wages, insurance, and DOT compliance. A highly effective way to boost your profitability is by leveraging tax deductions and government incentives available to the transportation industry. Whether overseeing a small fleet of delivery vans or managing an extensive fleet of Class 8 trucks, here’s how to keep more of your hard-earned dollars during tax time.
Section 179 of the IRS Tax Code allows businesses to write off the full purchase price of qualifying equipment, such as trucks, trailers, and other business vehicles, in the year they are placed into service. This applies to both new and used equipment.
For 2024, the deduction limit is $1,220,000, with a spending cap of $3,050,000. Bonus depreciation remains at 60% for 2024, applicable to new and used assets. Vehicles weighing over 6,000 lbs GVWR and used more than 50% for business are eligible for this deduction.
Even if you don’t qualify for Section 179 or bonus depreciation, fleet assets still lose value over time. The IRS permits you to deduct depreciation for trucks and trailers, which are depreciated over five years using a MACRS (Modified Accelerated Cost Recovery System) schedule.
Fuel is one of the largest operating expenses for fleets, but the good news is that fuel costs are fully deductible. This includes:
Be sure to keep accurate logs and receipts to support your claims.
Expenses for fleet management tools such as GPS tracking, electronic logging devices (ELDs), dash cams, and safety monitoring systems (like My Fleet AI) are fully deductible as business expenses. This includes the initial purchase costs of equipment and any ongoing subscription fees.
Salaries and wages for drivers, dispatchers, mechanics, and administrative staff are fully deductible. This includes fringe benefits such as health insurance, 401(k) contributions, and bonuses. Additionally, if your drivers are away from home overnight, you can deduct meal and incidental expenses through actual receipts or the IRS per diem rates.
These often-overlooked day-to-day operational costs are fully deductible, including:
You may be eligible for federal, state, or local incentives if you’re incorporating electric vehicles, alternative fuels (like CNG or LNG), or idle-reduction technology. Examples include:
Going green isn’t just good for the environment—it can also boost your tax return.
If you operate your business from a home office or dedicated space, you may deduct a portion of:
Remember to follow IRS guidelines for home office deductions to avoid red flags during an audit.
Tax time is more than just a yearly task; it’s an opportunity to plan and maximize your savings strategically. Working with a CPA or tax advisor familiar with the transportation industry can help uncover significant deductions and credits you might otherwise overlook.
To stay compliant and ensure you’re audit-ready all year, My Fleet AI’s S.A.F.E. (Strategic Automated Fleet Engine) can simplify the process. Backed by machine learning and supported by a 24/7/365 U.S.-based safety team, S.A.F.E. helps you stay ahead of safety violations, track key metrics, and keep your records in top shape throughout the year.