Trucking Accounting: IFTA, Per Diem, and Costing Explained

Trucking accounting works by layering three disciplines on top of standard bookkeeping: multi-jurisdiction fuel tax reporting through IFTA, per-diem meal deductions tied to Department of Transportation rules, and load-level cost accounting that separates fixed costs from variable costs. Carriers operate across many tax jurisdictions, incur fuel liabilities that shift with mileage, and must know their cost per mile to tell whether each run is profitable. Get these three right and you have the financial foundation most carriers lack.

Trucking accounting is more demanding than ordinary small-business bookkeeping because a single truck can create tax obligations in dozens of states in one quarter. This guide walks through IFTA fuel tax compliance, per-diem deductions for drivers, per-mile costing, and the 2026 depreciation rules that let carriers write off equipment quickly.

What Is IFTA and How Does It Work?

The International Fuel Tax Agreement (IFTA) is a compact among the 48 contiguous U.S. states and 10 Canadian provinces that consolidates fuel tax reporting for interstate motor carriers. Before IFTA, a carrier crossing 20 states had to file 20 separate fuel tax returns. Today, the carrier files one quarterly return with its base jurisdiction, which then distributes the tax revenue to the states where the miles were actually driven. The program is administered by IFTA, Inc., which publishes the governing articles of agreement and quarterly tax rate tables.

Who Must Carry an IFTA License

A motor vehicle must register under IFTA if it meets any one of these criteria:

• 2 axles and a gross vehicle weight (or registered GVW) over 26,000 pounds
• 3 or more axles, regardless of weight
• Used in combination when the combined weight exceeds 26,000 pounds

Recreational vehicles are excluded. Alaska, Hawaii, the District of Columbia, and three Canadian territories (Northwest Territories, Nunavut, and Yukon) are not IFTA members, so travel into those areas follows separate rules.

How IFTA Filing Works in Practice

Each IFTA licensee receives a license and a set of cab-card decals to display on qualified vehicles. Every quarter, the carrier files a single return showing total miles traveled and fuel purchased in each member jurisdiction. The base state calculates what tax is owed to each jurisdiction based on mileage, compares that to fuel taxes already paid through pump purchases, and produces a net payment or refund.

The 2026 IFTA quarterly due dates are:

Quarter	Period	Due Date
Q1	Jan 1 to Mar 31	April 30
Q2	Apr 1 to Jun 30	July 31
Q3	Jul 1 to Sep 30	October 31
Q4	Oct 1 to Dec 31	January 31, 2027

Late filings carry a penalty of $50 or 10% of the net tax due, whichever is greater, plus interest. Returns must be filed even when no tax is owed. Records supporting the return must be retained for at least 4 years.

What Records IFTA Requires

Accurate mileage and fuel data are non-negotiable. For each trip, you need:

• Date and origin/destination
• Route of travel
• Beginning and ending odometer readings
• Jurisdictions entered
• Gallons purchased in each state (with receipts showing the seller, date, gallons, and vehicle)

Most carriers use electronic logging devices (ELDs), which can auto-generate jurisdiction mileage summaries. However, ELD data must still be reconciled against fuel receipts before filing. Discrepancies trigger audits.

Per Diem Deductions for Trucking Companies

Per diem is one of the most valuable and most misunderstood tax tools in trucking accounting. Done correctly, it reduces taxable income without requiring itemized meal receipts.

The IRS Special Transportation Industry Rate

The IRS publishes a special meal and incidental expense (M&IE) rate for workers subject to Department of Transportation hours-of-service regulations. For the period running October 1, 2025 through September 30, 2026, the rate is $80 per day for travel within the continental United States (CONUS) and $86 per day outside CONUS. These figures are set in IRS Notice 2025-54 and the proration mechanics are explained in IRS Publication 463.

Instead of tracking every meal receipt, eligible workers multiply days away from their tax home by the applicable rate and use that as the basis for the deduction.

The 80% Deduction Rule for DOT Workers

Most business travelers can deduct only 50% of meal costs. Workers subject to DOT hours-of-service limits get a better deal under Internal Revenue Code Section 274(n)(3): they can deduct 80% of qualifying meal expenses. Applied to the 2026 CONUS rate:

• Full travel day: $80 x 80% = $64 deductible
• Partial day (departure or return): $80 x 75% x 80% = $48 deductible (the 75% partial-day rule applies first, then the 80% limitation)

Who qualifies under the DOT hours-of-service rules: interstate truck and bus drivers, certain railroad employees, certain air transportation workers, and merchant mariners.

Owner-Operators vs. Company Drivers

This is where many carriers get tripped up. Since the Tax Cuts and Jobs Act of 2017, W-2 company drivers can no longer claim the per diem deduction on their personal tax returns. The unreimbursed employee expense deduction was eliminated through 2025, and the OBBBA did not restore it for company drivers.

Owner-operators and independent contractors filing Schedule C retain full access to the 80% per diem deduction as a business expense. Some motor carriers reimburse company drivers through a per-diem pay program, which shifts the tax treatment to the company level. That arrangement requires careful structuring to comply with IRS accountable plan rules.

Owner-operators should also note that the Section 199A qualified business income (QBI) deduction, which can shelter up to 20% of pass-through business income, was made permanent by the One Big Beautiful Bill Act (OBBBA) in 2025. A profitable owner-operator taxed as a sole proprietor, partnership, or S corporation may combine the per diem deduction with the QBI deduction, subject to the applicable income thresholds and limitations.

Trucking Cost Accounting: The Per-Mile Framework

No area of logistics accounting causes more financial damage than weak cost tracking. Carriers that don’t know their true cost per mile (CPM) routinely accept loads that lose money.

Fixed Costs vs. Variable Costs

Fixed costs are incurred regardless of how many miles the truck runs:

• Truck note or lease payment
• Insurance premiums (liability, cargo, physical damage)
• Permits, licenses, and IRP registrations
• ELD subscriptions and compliance software
• Driver base salary (if applicable)
• Overhead and administrative costs

Variable costs scale with miles driven:

• Fuel
• Maintenance and tire replacement
• Tolls and scales
• Driver per-mile or percentage pay
• Broker fees and fuel surcharge adjustments

Calculating Cost Per Mile

The formula: (total fixed costs + total variable costs) / total miles driven for the period, typically monthly.

As an industry benchmark, the American Transportation Research Institute (ATRI) reported the average marginal cost of operating a truck reached $2.336 per mile in 2025, the highest in the report’s history (an industry survey estimate, not a codified standard). Fuel is typically the largest or second-largest line item, historically running around 20 to 30% of total operating cost depending on diesel prices. A tractor-trailer averaging 6.5 miles per gallon at $3.81 per gallon of diesel spends roughly $0.59 per mile just on fuel (an illustrative estimate; actual fuel prices vary).

Carriers should maintain two numbers at all times: breakeven CPM and target CPM. Breakeven CPM is the floor below which every load creates a loss. Target CPM adds the profit margin the business needs to survive and grow. Any load rate below breakeven CPM should be declined or renegotiated.

Revenue Recognition Under ASC 606

For carriers and brokers subject to U.S. GAAP, ASC 606, Revenue from Contracts with Customers governs how freight revenue is recorded. Transportation revenue is generally recognized over time as the carrier satisfies its performance obligation (delivering the shipment), because the customer simultaneously receives and consumes the benefit as the truck moves.

Practical implications:

• In-transit loads at period end create a contract asset (unbilled revenue) that must be estimated and recorded.
• Freight brokerage revenue requires a principal-vs.-agent analysis to determine whether to record gross revenue (carrier as principal) or net revenue (broker as agent).
• Incremental costs to obtain a contract, such as certain sales commissions, may need to be capitalized and amortized rather than expensed immediately.

Smaller carriers on the cash basis or simplified accrual method are generally exempt from the full ASC 606 analysis, but should still track load-level revenue consistently.

Equipment Depreciation: 2026 Tax Rules for Carriers

Heavy equipment purchases represent some of the largest capital outlays in trucking. The 2026 tax environment is unusually favorable thanks to the One Big Beautiful Bill Act (OBBBA).

100% Bonus Depreciation

The OBBBA restored 100% bonus depreciation on a permanent basis for qualified property acquired after January 19, 2025. Under IRS Notice 2026-11, both the acquisition date and the placed-in-service date must fall after that cutoff to qualify for the full 100% write-off. For a carrier buying a new semi-truck in 2026, the entire purchase price of the tractor can be deducted in year one rather than depreciated over a 3-year MACRS life. See the IRS guidance on bonus depreciation for details.

Trailers generally depreciate over 5 years under MACRS. With 100% bonus depreciation, those too can be fully expensed in year one.

Section 179 Expensing

Carriers can alternatively use Section 179 to expense equipment up to $2,560,000 in tax year 2026, with a dollar-for-dollar phase-out beginning at $4,090,000 in total qualified purchases and full phase-out at $6,650,000. These limits are now permanent and indexed annually for inflation under the OBBBA. For most owner-operators and small fleet operators, Section 179 and bonus depreciation produce the same result on heavy commercial trucks, since commercial trucks over 14,000 lbs GVWR are not subject to the “luxury auto” caps that limit lighter passenger vehicles.

The Section 179 deduction cannot create a tax loss, while bonus depreciation can. For a carrier with strong 2026 earnings, Section 179 is typically applied first to minimize the current-year tax bill, with bonus depreciation absorbing any remaining basis.

Planning Around Depreciation

Large first-year deductions are powerful, but carry trade-offs. A carrier that expenses a $180,000 truck in 2026 has no depreciation to shelter income in 2027 and 2028. Finance leaders should model multi-year tax liability before choosing an accelerated deduction strategy, especially if equipment purchases will slow in future years. This is an area where proactive tax planning pays for itself.

Common Accounting Mistakes Trucking Companies Make

1. Mixing personal and business finances. Owner-operators frequently run personal expenses through the business account, which complicates IFTA audits and Schedule C reviews.
2. Ignoring fuel receipts. IFTA auditors reconstruct fuel purchases from receipts. Missing receipts mean the carrier cannot prove taxes were paid at the pump, resulting in assessed taxes with no credit.
3. Failing to accrue in-transit revenue at month end. Carriers on accrual basis must estimate and record revenue for loads that are in transit when the books close.
4. Using a single revenue line. Fuel surcharges, accessorial fees, and detention pay should be tracked separately from linehaul revenue so management can see true contribution by service type.
5. Skipping a maintenance reserve. Variable maintenance costs are lumpy, but they are predictable at a fleet level. Carriers that expense maintenance only when it occurs routinely underprice loads in good months and then face cash crises when major repairs arrive.

Related reading: Farm Accounting and Agriculture Tax Basics

Frequently Asked Questions

What is IFTA and who is required to file?

IFTA is the International Fuel Tax Agreement, a compact among 48 contiguous U.S. states and 10 Canadian provinces that lets interstate carriers file one quarterly fuel tax return instead of one per state. Any commercial motor vehicle with 2 axles and over 26,000 lbs GVW, 3 or more axles regardless of weight, or a combination exceeding 26,000 lbs must register for IFTA with its base state and file quarterly.

How much per diem can a truck driver deduct in 2026?

Owner-operators and independent contractors subject to DOT hours-of-service regulations can use the IRS special transportation industry rate of $80 per day (CONUS) and deduct 80% of that amount, resulting in a $64 deduction per full travel day. Company drivers paid as W-2 employees cannot claim per diem on their personal returns; some carriers use per-diem pay programs to provide the benefit at the company level instead.

What is cost per mile and why does it matter?

Cost per mile (CPM) is total operating costs divided by total miles driven for a period. It is the core profitability metric in trucking because it allows a carrier to evaluate any load rate against a break-even floor. A carrier that doesn’t know its CPM cannot accurately price freight and will often accept losing loads without realizing it.

Can a trucking company deduct the full cost of a new truck in 2026?

Yes, in most cases. Under the OBBBA, 100% bonus depreciation applies to qualified property acquired after January 19, 2025 and placed in service after that date. A commercial tractor purchased and put to work in 2026 can be fully expensed in year one. Section 179 provides an alternative up to $2,560,000 in 2026 with a phase-out starting at $4,090,000 in total purchases, but unlike bonus depreciation, it cannot generate a net operating loss.

What records must trucking companies keep for IFTA?

IFTA requires carriers to retain trip records, odometer logs, and fuel receipts for a minimum of 4 years. Each trip record must show the date, origin and destination, route, beginning and ending odometer readings, jurisdictions traveled through, and gallons purchased with receipts. ELD-generated mileage reports are acceptable but must be reconciled against fuel purchase records before filing.

What is the difference between gross revenue and net revenue for a freight broker?

Under ASC 606’s principal-vs.-agent framework, a broker that controls the freight service before it is transferred to the customer (acts as principal) records the full amount billed to the shipper as gross revenue. A broker that arranges the service but does not control it (acts as agent) records only its net commission or margin as revenue. The distinction affects the top-line revenue figure significantly and is subject to scrutiny in audits and quality-of-earnings reviews.