Owner-Operators Want to Know: The Top Questions Revealed
Top Questions Owner Operators Ask: Answered by M7
Running a trucking business brings many questions, especially when you want to operate profitably and stay compliant. At M7, we support owner operators every day and help them understand their numbers, reduce expenses, and keep more of what they earn. Below are the most common questions we receive along with straightforward answers to help you run a stronger business.
Q: How do I keep track of how my business is doing?
The most effective way to measure the health of your business is by keeping complete and accurate records of both revenue and expenses. You should save every receipt and record your transactions regularly. Building a monthly profit and loss statement allows you to see how your business is performing over time. When you categorize expenses, you gain insight into where you are spending too much and where improvements can be made.
Q: What is my breakeven point?
Your breakeven point is the amount of revenue your business must generate in order to cover your business expenses and your personal living costs. Every owner operator should know this number. Review your costs at least every six months or whenever there is a major change in your business or personal life. Once you understand your breakeven, you have a clear target that shows the minimum amount you must earn to avoid losing money.
Q: Do I need a business plan?
Yes. A business plan is your roadmap for success. It outlines how your business will operate, how you expect to generate revenue, the expenses you will face, and the goals you want to achieve. Even though your plan may evolve over time, starting with a defined structure helps guide your decisions and keeps you focused on long term success.
Q: What is Per Diem?
Per Diem is a tax deduction approved by the IRS that covers meals and incidental expenses while you are traveling away from home. As of October 1, 2024, the Per Diem rate in the continental United States is eighty dollars per day. Because the IRS only allows eighty percent of that rate to be deducted, many drivers refer to the deductible amount of sixty four dollars per day.
Q: What is IFTA?
The International Fuel Tax Agreement, commonly known as IFTA, is an agreement among states and Canadian provinces that requires interstate carriers to report fuel taxes. Instead of buying separate decals for each state, you file one quarterly report listing your miles driven and gallons purchased. This determines whether you owe fuel tax or are due a refund. IFTA does not create a new tax. It simply redistributes the fuel tax to the states where the fuel was actually used.
Q: What is HVUT?
The Heavy Vehicle Use Tax is a yearly IRS tax for vehicles weighing fifty five thousand pounds or more. The annual tax can be as much as five hundred fifty dollars depending on vehicle weight. HVUT is reported using IRS Form 2290. You must file during the first month that your vehicle is operated on public highways.
Q: What are the biggest expenses for owner operators?
The largest expenses typically include fuel, the cost of the truck, insurance, taxes, and daily living costs such as food and beverages.
Q: How much should I expect to spend on fuel?
Owner operators generally spend between fifty thousand and seventy thousand dollars each year on fuel. Using fuel cards and price saving mobile apps can significantly reduce this amount.
Q: How do I improve my fuel efficiency?
Fuel is the expense you have the most control over. You can improve fuel efficiency by maintaining steady speeds, reducing hard braking, limiting idle time, performing regular maintenance, and using savings programs that reduce the cost of fuel.
Q: How much should I set aside for taxes?
A good rule of thumb is to save between twenty five and thirty percent of your weekly net income for quarterly tax payments.
Q: How much should I save for maintenance?
A typical recommendation is to save between seven cents and fifteen cents per mile for maintenance. The exact amount depends on the age of your equipment, how you drive, and the type of freight you haul.
Q: What business entity should I choose?
The most common structures for trucking businesses are sole proprietorships, limited liability companies, and S corporations. Each structure offers different levels of liability protection and tax treatment. Your choice should be based on your business goals, your income, and the way you plan to pay yourself.
Q: Should I buy my truck or lease it?
Buying a truck gives you ownership but usually requires more upfront cost. Leasing can reduce the initial financial burden. Lease purchase programs allow drivers to make payments toward ownership at the end of the contract. Financing companies also offer loans specifically for trucks if you prefer to own the equipment outright.
Q: Should I run on the spot market or lease onto a carrier?
Many new owner operators begin by leasing onto a carrier because it offers stability, support, and a steady flow of freight. The breakeven point for choosing between the spot market and leasing, as of 2025, is forty eight cents per mile. If you can earn more than an additional forty eight cents per mile on the spot market, it may be worth the switch as long as you are comfortable managing the added risk and responsibility.
Q: How do I choose the right carrier to lease onto?
Consider where you want to drive, the type of freight you want to haul, the carrier’s reputation, pay rates, load availability, and how the company supports its owner operators. Researching these details helps you make the best choice for your goals and lifestyle.
Q: What does it cost to get my own authority?
Start up costs vary, but common expenses include the truck itself, the trailer, insurance, DOT registration fees, authority application fees, permits, drug and alcohol testing, and the cost of using load boards. Most drivers should be prepared to spend approximately thirty thousand dollars in additional expenses during the first year. You should also expect to generate about fifty thousand dollars or forty eight cents per mile in additional revenue to make the switch financially worthwhile.
Q: What insurance do I need?
If you operate under your own authority, you will need primary liability insurance, cargo insurance, physical damage coverage, bobtail insurance, and non trucking liability. When you are leased to a carrier, primary liability is usually included, but you will still need the other forms of coverage.
Q: How much do owner operators make each year?
Income varies based on many factors. The average net income for both leased and independent operators combined is up to sixty four thousand dollars per year as of 2025.
Q: How much should I pay myself?
Your pay is whatever is left after business expenses are covered and tax money is set aside. Paying yourself a set salary does not reduce your taxes unless you are structured as an S corporation. Many drivers explore this option with their advisors to determine what works best for their situation.
Q: How does M7 help owner operators?
M7 specializes in helping trucking businesses stay organized, compliant, and profitable. We provide bookkeeping, tax support, and strategic financial guidance that helps owner operators make confident decisions. Whether you are just starting your business or preparing to grow, M7 is here to help you every step of the way.
