What’s behind the mileage mystery for Texas 1099 drivers

Owner-operators and leased-on contractors in Texas juggle federal taxes, state operating rules, and day-to-day costs. With filing season for 2025 miles just around the corner, the big question we hear is: should a 1099 trucker use the IRS standard mileage rate or deduct actual expenses? The answer depends on your equipment, how you’ve claimed deductions in the past, and how you operate in Texas.

The 2025 mileage rate — and who can use it

Beginning January 1, 2025, the IRS business standard mileage rate is 70 cents per mile (it was 67 cents in 2024 and 65.5 cents in 2023). The rate applies to cars, vans, pickups, and panel trucks. That means hotshot and light-duty pickup operations may qualify. Most Class 7–8 tractors do not, because the standard mileage method is designed for “cars” as defined by the IRS, and tractors are typically deducted using actual expenses and depreciation.

You must choose mileage in the first year a vehicle is placed in service for business. If you start with mileage, you can switch to actual in a later year.
You cannot use mileage if you’ve taken Section 179, bonus depreciation, or other accelerated depreciation on that vehicle, or if you run five or more vehicles at the same time (fleet operations).
For leased vehicles, if you pick mileage, you must use it for the entire lease term.

If you’re sure you qualify and your costs per mile are consistently below that 70¢ benchmark, the standard rate can simplify recordkeeping: keep a contemporaneous log that shows date, origin/destination, business purpose, and miles.

When actual expenses usually win for truckers

For most over-the-road owner-operators running tractors, the actual-expense method typically produces a larger deduction because it captures high-cost line items that mileage can’t. Actual expenses include fuel, oil and DEF, routine maintenance and major repairs, tires, insurance, lease payments or depreciation, wash and maintenance supplies, tolls, scales, parking, and interest on a business vehicle loan (for the business-use percentage).

Meals are also a major line item. Truckers subject to DOT hours-of-service limits can deduct 80% of business meals (versus the general 50%). You can use actual receipts or an IRS-approved per diem for meals and incidental expenses while you’re away from your tax home on overnight travel. Lodging must be substantiated with receipts if you claim it.

Permits, licenses, and taxes: deductible?

Generally, yes—ordinary and necessary operating fees are deductible for 1099 truckers in the year paid. That includes:

Heavy Vehicle Use Tax (HVUT) paid on Form 2290 for vehicles 55,000 lbs. and up.
Texas intrastate motor carrier registration (TxDMV Number) and fees; Unified Carrier Registration (UCR) for interstate carriers.
International Fuel Tax Agreement (IFTA) decals and quarterly true-up payments (net fuel tax is part of your operating expense).
International Registration Plan (IRP/apportioned plates) fees, oversize/overweight permits, and temporary permits.
DOT-required drug/alcohol consortium dues, physicals, and many compliance costs.

If a permit covers multiple years, you may need to spread (amortize) the cost over the permit term rather than deducting it all at once. Ask your tax pro how to handle multi‑year credentials in your books.

Texas-specific compliance checklist for 1099 operators

Register properly: Intrastate carriers need a TxDMV Number; interstate carriers need FMCSA operating authority plus UCR.
Fuel and registration: If you run interstate and meet thresholds, obtain IFTA and IRP. Keep fuel and mileage records that satisfy IFTA audit standards.
Markings and insurance: Texas requires proper USDOT/Legal Name markings and continuous evidence of insurance on file for intrastate authority.
Classification matters: Texas Workforce Commission applies a common-law, 20-factor test for independent contractors. Control over how, when, and where work is performed weighs toward employee status. Misclassification can trigger back taxes and penalties.

Practical decision tree: mileage vs. actual

Running a pickup or light-duty rig, low annual costs, and no past 179/MACRS on the vehicle? Mileage may be simpler and competitive at 70¢/mi.
Operating a Class 7–8 tractor or leased unit with high fuel, repair, and insurance costs? Actual expenses plus depreciation usually deliver a larger write-off.
Mixed operations or changing equipment? Run both scenarios in a bookkeeping tool before you file 2025 returns, and keep robust logs either way.

Bottom line

For Texas 1099 truckers, the “mileage or mystery” problem clears up once you match the IRS rules to your equipment and operation. Light-duty commercial vehicles may benefit from the 70¢ mileage rate in 2025, but most tractor operations should stick with actual expenses, capture every deductible permit and fee, and take advantage of the 80% DOT meals deduction. Keep clean records, verify Texas credentials (TxDMV, IFTA, IRP, UCR), and review your contractor status. When in doubt, run the math both ways with a tax professional before filing.

Sources Consulted: Internal Revenue Service; Texas Department of Motor Vehicles; Texas Comptroller of Public Accounts; Texas Workforce Commission; Texas Department of Public Safety.

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This article was prepared exclusively for truckstopinsider.com. For professional tax advice, consult a qualified professional.