Do you drive a bus for a living? Being on the road, helping people get where they need to go can feel very rewarding. Reward yourself at tax time by claiming deductions which can lower the amount you owe in taxes and put more money in your pocket.
If you work for a specific business, you will receive a Form W-2, Wage and Tax statement from your employer. If Box 13, Statutory Employee, is checked on your W-2, you’ll need to report that income on a Schedule C, Profit and Loss from Business. Statutory employees include commissioned drivers.
Self-employed bus drivers should report their income on a Schedule C. You can either account for your income yourself or expect a Form 1099-MISC. If you receive tips, you must also consider this as taxable income. Self-employment tax must be paid by self-employed bus drivers who have net earning greater than $400. Because of this, you may have to make estimated tax payments on the amount you report on your schedule C.
You can reduce your owed taxes by claiming unreimbursed work expenses such as:
- Vehicle expenses such as parking fees and tolls, as well as maintenance including fuel, oil, and repairs and other expenses (You cannot use the standard mileage rate when the bus is used for hire)
- Liability insurance fees
- Union dues
- Subscriptions to trade publications
- Uniform costs, as long as they are required for wear and not suitable to wear everyday
- State or local government licenses and regulatory fees
- Flat rate occupational taxes and excise taxes
- Leasing and rental costs for equipment rented
- Travel expenses, with limitations, including meals and lodging
If you are self-employed, you would deduct these expenses on a Schedule C. If you are an employee, your expenses are deducted on a Schedule A as a Miscellaneous Itemized deduction.
Deducting Different Travel Expenses
You are r eligible to deduct travel expenses as a bus driver if you are traveling farther than your normal business home for longer than an average workday. You don’t have to be away for the entire day, however you will have to break long enough to get the required amount of rest to continue driving. Taking a catnap or stopping for a quick lunch doesn’t count as a travel expense, and most local bus drivers will not be eligible to deduct travel expenses. If you drive a bus long distance, you may be able to claim these expenses as long as you keep a log book with receipts, dates, times, and place of each incurred expense, as well as how it relates to the job. You will have to determine your tax home before determining if you are outside of the regular work home. Your tax home is generally:
- The place you do your regular business, regardless of where you live.
- Includes the entire city or general area in which your business is located
- If you have more than one regular place of business, your tax home is the place where you do the most business.
- In some cases, your tax home may be the place where you live regularly, if the nature of your job doesn’t account for a regular or main area of business.
- If you are considered a transient, being that you have no place of regular business or housing, your tax home is wherever you work.
Bus drivers can usually determine their tax home by considering the place where they begin and end a trip. This can be a central location, such as a bus depot, even if you don’t live near the area.
Meal Allowance Limitations and Deductions
If you are entitled to a meal allowance due to traveling away from your tax home for an extended period of time, you can use the standard meal allowance instead of deducting actual expenses. In most areas, the standard meal allowance is $46 per day, however some metro areas increase the allowance to $59 per day for transportation workers.
Typically, you’re only allowed to deduct 50% of your actual meal expenses, unless your meals take place during the Department of Transportation’s “hours of service.” In these cases, up to 80% of meal expenses can be deducted.