Updated for 2025 tax year returns filed in 2026
Quick take: For 2025 returns, the 20% Qualified Business Income deduction is now permanent, 100% bonus depreciation is back for qualifying equipment acquired after Jan 19, 2025, the SALT cap is temporarily higher, per diem remains $80 CONUS and $86 OCONUS, and the business mileage rate was 70¢ per mile for 2025 and rises to 72.5¢ for 2026. [rsmus.com], [freightwaves.com], [irs.gov], [irs.gov], [kpmg.com], [irs.gov], [irs.gov]
Heads up: This article is educational only. Always consult a qualified tax pro about your situation.
What is new for the 2026 filing season
1) QBI deduction is now permanent, with a new minimum beginning in 2026
- The 20% Qualified Business Income deduction under Section 199A is now permanent for sole proprietors, S‑corps, and partnerships. This provides long‑term planning certainty for owner‑operators who file as pass‑throughs. [rsmus.com], [northerntrust.com]
- The law also introduces a minimum QBI deduction of $400 starting in 2026 for taxpayers with at least $1,000 of qualified active business income, subject to rules and income thresholds. [rsmus.com]
- IRS has a consolidated page on the new law’s provisions and ongoing guidance. [irs.gov]
2) 100% bonus depreciation reinstated for new qualifying assets
- Congress restored 100% bonus depreciation for qualified assets acquired after Jan 19, 2025 and placed in service before 2030, which is significant for new truck and trailer purchases. [freightwaves.com]
- This change alters the planning balance between Section 179 and bonus depreciation for high‑dollar equipment. [overdriveonline.com]
3) Individual brackets and higher standard deduction made permanent
- The seven‑bracket individual income tax system from 2017 is permanent, and the higher standard deduction is also permanent, while the personal exemption remains eliminated. [atbs.com], [overdriveonline.com]
4) SALT cap temporarily increased
- The cap on state and local tax deductions is $40,000 per return for 2025 through 2029, subject to income‑based phaseouts for higher earners. [atbs.com], [jdsupra.com]
5) Per diem rates for transportation workers
- Special M&IE per diem rates for transportation industry workers remain $80 per day for CONUS travel and $86 OCONUS, effective for travel on or after Oct 1, 2025. The incidental‑expenses‑only rate is $5. [irs.gov], [kpmg.com]
- For taxpayers who use the high‑low method, the meals portion is $86 for high‑cost localities and $74 for other CONUS localities. [irs.gov]
- IRS Publication 463 explains who can use the standard meal allowance and the recordkeeping rules. [irs.gov]
6) Standard mileage rates you will actually use
- For 2025 expenses claimed on 2025 returns, the business mileage rate is 70¢ per mile. Medical and moving are 21¢, charity is 14¢. [irs.gov], [kpmg.com]
- Beginning Jan 1, 2026, the business rate increases to 72.5¢ per mile. Medical and moving drop to 20.5¢, charity stays 14¢. [irs.gov]
Owner‑operator taxes you will pay
- Self‑employment tax: 15.3% total, composed of 12.4% Social Security up to the applicable wage base and 2.9% Medicare on all SE income. High earners may owe an additional 0.9% Medicare tax above statutory thresholds. You can deduct one‑half of SE tax in arriving at AGI. [irs.gov]
- Income tax: Federal brackets are permanent. State income tax depends on your state of residence and filing status. [atbs.com]
Deadlines you cannot miss for the 2025 tax year
- Quarterly estimated payments for 2025 income: Apr 15, 2025, Jun 16, 2025, Sep 15, 2025, and Jan 15, 2026. If a date falls on a weekend or holiday, the due date is the next business day. [irs.gov]
- Tax Day for 2025 returns: Apr 15, 2026, unless extended by disaster relief. [blog.taxact.com]
Trucking‑specific deductions that usually save the most
1) Per diem for meals and incidental expenses
2) Vehicle costs: choose standard mileage or actual
- If you buy a truck or trailer after Jan 19, 2025, evaluate 100% bonus depreciation vs Section 179 for the best outcome. [freightwaves.com], [overdriveonline.com]
3) Depreciation and equipment
- With 100% bonus depreciation reinstated for qualifying property acquired after Jan 19, 2025, many owner‑operators can write off the full cost in the year placed in service through 2029. Coordinate with your preparer to avoid state‑level mismatches. [freightwaves.com]
4) Insurance premiums
- Premiums for cargo, liability, physical damage, and health insurance are generally deductible as ordinary and necessary business expenses, subject to IRS rules. See Publication 463 for travel‑related rules and substantiation. [irs.gov]
5) Communications, compliance, and admin
- ELD devices, dispatch and load board subscriptions, professional fees, accounting or tax prep, mobile phone used for business, safety gear, permits, and tolls are typically deductible when ordinary and necessary for your operation. Publication 463 details travel and recordkeeping standards. [irs.gov]
QBI planning for owner‑operators and small fleets
- With QBI now permanent, pass‑through owners can keep modeling around that 20% deduction, subject to wage, property, specified service, and threshold rules. The change provides more certainty for choosing or maintaining sole prop, partnership, or S‑corp status. [rsmus.com]
- The minimum QBI deduction of $400 begins in 2026 for those with at least $1,000 of qualified active business income. This can help smaller operators who might otherwise phase down due to other limitations. [rsmus.com]
- IRS continues to publish implementing guidance for the 2025 law, so check for updates during filing season. [irs.gov]
Recordkeeping that stands up if you are audited
- Keep trip logs and settlements, save fuel and maintenance receipts, note dates, locations, and business purpose for travel, and reconcile per diem days. Publication 463 outlines required elements for travel and meals substantiation. [irs.gov]
- For mileage, keep a contemporaneous log if you use the standard mileage method, or maintain full cost records if you use actual expenses. The IRS mileage releases provide annual rates and depreciation components. [irs.gov]
Quick reference: rates and limits you will reference most
- Per diem (transportation workers): $80 CONUS, $86 OCONUS, incidental‑only $5 per day, effective for travel on or after Oct 1, 2025. High‑low meals portion is $86 high‑cost, $74 other. [irs.gov]
- Meals deductibility for DOT drivers: 80% of otherwise allowable meal costs when away from home. See Pub 463. [irs.gov]
- 100% bonus depreciation: available for qualifying property acquired after Jan 19, 2025 and placed in service before Jan 1, 2030. [freightwaves.com]
- SALT cap: $40,000 for 2025 through 2029, with phaseouts for higher incomes. [atbs.com], [jdsupra.com]
Are Factoring Fees Tax Deductible?
Yes, in most cases. Under U.S. tax law (IRC §162), fees that are ordinary and necessary for carrying on a trade or business can be deducted. Factoring and interest fees meet this standard.
As always, it’s important to consult an accounting expert to properly deduct these fees and understand what documentation, if any, is required.
Common mistakes that cost truckers money
- Mixing personal and business expenses in one account, which makes audits harder and can reduce allowable deductions. Use separate accounts and cards. Publication 463 explains documentation tests. [irs.gov]
- Not reconciling per diem days with logs. Your records must show that you were away from home with a required rest. [irs.gov]
- Missing estimated payments, which triggers penalties and interest. Mark your calendar for Apr 15, Jun 16, Sep 15, and Jan 15. [irs.gov]
- Ignoring bonus depreciation vs Section 179 strategy for truck purchases. The reinstated 100% bonus can be more flexible than 179 in some cases. [freightwaves.com], [overdriveonline.com]
Frequently asked questions
Can a leased‑on owner‑operator use per diem?
Yes, if you are self‑employed, operate under DOT hours‑of‑service, and meet the “away from home” rules, you can use the transportation worker per diem. Keep proper logs and apply the 80% meals limitation. [irs.gov], [irs.gov]
Should I use standard mileage or actual expenses for my pickup used to chase parts and run administrative trips?
Run the numbers both ways. The 2025 business mileage rate is 70¢ per mile and may beat actuals for lower‑cost vehicles. The 2026 rate will be 72.5¢. [irs.gov], [irs.gov]
If I bought a tractor in late 2025, can I write off the full cost?
If it is qualified property and acquired after Jan 19, 2025, 100% bonus depreciation may allow a full write‑off in the year placed in service, subject to rules. Coordinate with your preparer. [freightwaves.com]
Action checklist for owner‑operators
- Now: Forecast 2025 taxable income and true‑up your Jan 15, 2026 estimate if needed. [irs.gov]
- If buying equipment: Model 100% bonus depreciation vs Section 179, including state impacts and future income plans. [freightwaves.com], [overdriveonline.com]
- Every trip: Keep contemporaneous logs that match dispatch and settlement records. [irs.gov]
Sources and further reading
- IRS overview of the 2025 law changes and guidance: One, Big, Beautiful Bill provisions. [irs.gov]
- Permanent QBI deduction, thresholds, and minimum deduction analyses. [rsmus.com], [northerntrust.com]
- 100% bonus depreciation reinstatement for assets acquired after Jan 19, 2025. [freightwaves.com]
- Per diem rates for transportation workers in effect for travel on or after Oct 1, 2025. [irs.gov], [kpmg.com]
- Publication 463, travel and recordkeeping rules. [irs.gov]
- Self‑employment tax fundamentals. [irs.gov]
- SALT cap increase for 2025 through 2029.
TBK Bank does not provide tax, legal, or investment planning advice. Consult with your legal or tax counsel. State taxes may apply.