A truck runs on fuel and paperwork. For carriers and owner-operators, the paperwork includes some of the most detailed record requirements of any small business, and the penalties for sloppy records are real. Good bookkeeping here is not about neat columns. It is about being able to prove, jurisdiction by jurisdiction, where your trucks ran and what they burned.
Fuel tax, vehicle tax, and per diem rules are set by the IRS, the IFTA organization, and each state, and change periodically. The points below reflect long-standing rules. Confirm dates, thresholds, and rates with the relevant agency before filing.
IFTA: what the books must support
The International Fuel Tax Agreement lets carriers with qualified motor vehicles file a single quarterly fuel tax return with their base jurisdiction instead of separate returns for every state. Your return reports miles driven and fuel purchased in each member jurisdiction, and the tax is reconciled by state. To support it you need:
- Total miles and miles by jurisdiction for each vehicle and quarter, usually from trip sheets or an ELD or GPS system.
- Fuel purchased by jurisdiction, with receipts showing date, location, gallons, fuel type, and price.
- Records of fuel used off-road or for non-propulsion purposes if you claim related credits.
- A retention period that meets IFTA requirements. Confirm the current rule with your base jurisdiction.
Quarterly timing
IFTA returns are generally due by the end of the month following the quarter, so the calendar runs April 30, July 31, October 31, and January 31. Late returns carry penalties and interest and can put your license at risk. Treat IFTA as a recurring month-end close item, not an annual chore.
Heavy highway vehicle use tax
Heavy vehicles at or above a minimum taxable gross weight are subject to a federal highway vehicle use tax, reported on Form 2290 and generally covering a July 1 to June 30 period. Keep the stamped Schedule 1 proof of payment, since states require it for registration. Confirm the weight threshold, due date, and rates in the current IRS instructions.
Driver settlements and owner-operator deductions
- 1Record gross revenue per load or settlement, not just the deposit.
- 2Track every chargeback, escrow, insurance deduction, and fuel advance taken by the carrier or lessor.
- 3Record trailer, ELD, and other fees paid to the carrier as expenses, not offsets to revenue.
- 4Separate truck payments into principal and interest. Principal is not an expense.
- 5Track maintenance, tires, tolls, scales, permits, and parking as separate categories.
- 6Capture insurance premiums and licensing fees with the policy periods.
Depreciation and equipment
Trucks and trailers are major assets. How you acquire and finance them affects depreciation, interest, and cash flow. Section 179 and bonus depreciation rules have been amended by recent legislation, so confirm current limits before a purchase. Keep purchase invoices, financing documents, and in-service dates. See small business year-end tax planning.
Per diem for drivers
Long-haul drivers can generally use a special per diem rate for meals and incidental expenses while away from home overnight, instead of tracking actual receipts, and the meal portion for drivers subject to Department of Transportation hours-of-service limits is deductible at a higher percentage than for most taxpayers. Employees generally cannot deduct unreimbursed travel on their personal return, while owner-operators and companies can. Confirm the current per diem rates and percentages with the IRS before applying them.
Payroll and classification
Carriers that use company drivers run payroll; those that use owner-operators issue 1099s. The line between employee and contractor is a frequent audit and unemployment claim issue in this industry. Read W-2 vs 1099 classification and small business payroll services.
A monthly trucking close
- 1Reconcile bank, fuel card, and factoring accounts.
- 2Match fuel receipts and card statements to miles by jurisdiction.
- 3Reconcile settlements and freight invoices to deposits and receivables.
- 4Record maintenance, tolls, and insurance by unit if you track profitability per truck.
- 5Review payroll and driver pay.
- 6Prepare the IFTA data every quarter-end.
Profitability by truck and lane
Cost per mile, revenue per mile, and deadhead percentage are the numbers that tell you whether a truck is making money. Your books should let you compute them for each unit. If your records cannot do that, see bookkeeping cleanup services.
Our bookkeeping service supports carriers and owner-operators with fuel, mileage, and settlement tracking, and our tax preparation service handles the returns. To discuss your bookkeeping needs, tell us your fleet size, whether you use factoring, and which states you run in.
