Common Business Questions for Owner-Operators

Q: How can I track how my business is performing?

M7 Tax: The foundation of a healthy trucking business is accurate financial tracking. This starts with consistently recording all income and expenses and saving every receipt. These records allow you to generate a profit and loss (P&L) statement, which shows how your business is performing month over month.

By categorizing expenses: fuel, maintenance, insurance, taxes, and more… you can pinpoint where money is being lost and where improvements can be made. Reviewing your P&L regularly gives you clarity and control over your operation.

Q: What is my breakeven point?

A: Your breakeven point is the minimum revenue you need to cover both business expenses and personal living costs. This can be measured daily, weekly, monthly, or per mile.

Your business plan should outline this number clearly. Personal expenses should always be factored in and reviewed at least twice per year or whenever your situation changes. At M7 Tax, we help owner-operators build customized profit plans so they know exactly how much they need to earn to avoid operating at a loss.

Q: Do I really need a trucking business plan?

M7 Tax: Yes. A business plan gives you a roadmap for how your trucking operation will run. While your strategy may evolve, having the fundamentals written down helps guide decisions, set financial goals, and measure progress over time.

Q: What is Per Diem?

M7 Tax: Per Diem is an IRS-approved tax deduction for meals and incidental expenses incurred while traveling away from home for work. The IRS sets the Per Diem rate, which as of October 1, 2024, is $80 per day within the continental U.S.

Typically, only 80% of that amount is deductible, which is why you may hear the deductible amount referenced as $64 per day.

Q: What is IFTA?

M7 Tax: The International Fuel Tax Agreement (IFTA) is an agreement among the lower 48 U.S. states and 10 Canadian provinces that simplifies fuel tax reporting for interstate carriers.

Instead of filing fuel tax reports in each state, carriers file one quarterly IFTA report that accounts for miles driven and fuel purchased. IFTA doesn’t add new taxes—it redistributes fuel taxes to the states where fuel is actually used.

Q: What is HVUT?

M7 Tax: The Heavy Highway Vehicle Use Tax (HVUT) is an annual IRS tax for trucks with a taxable gross weight of 55,000 pounds or more. The maximum tax is currently $550 per year, depending on vehicle weight.

HVUT is reported using IRS Form 2290 and follows a tax year running from July 1 to June 30. The form must be filed during the first month the vehicle is used on public highways.

Q: What are the biggest expenses for owner-operators?

M7 Tax: The most significant costs typically include:

• Fuel

• Truck payments

• Insurance

• Taxes

• Food and beverages on the road

Q: How much should I expect to spend on fuel?

M7 Tax: Many owner-operators spend between $50,000 and $70,000 annually on fuel. Using fuel cards, mobile apps, and strategic fueling habits can help reduce these costs significantly.

Q: How can I improve fuel efficiency?

M7 Tax: Fuel is usually the largest controllable expense in trucking. You can improve efficiency by:

• Maintaining your truck and trailer properly

• Driving efficiently (speed control and smooth braking)

• Using fuel discount programs and cards

Even small changes can add up to major savings over the year.

Q: How much should I set aside for taxes?

M7 Tax: A general guideline is to save 25%–30% of your weekly net income for quarterly tax payments. This helps prevent surprises and penalties at tax time.

Q: How much should I budget for maintenance?

M7 Tax: We typically recommend saving $0.07 to $0.15 per mile for maintenance and repairs. The exact amount depends on factors like equipment age, driving habits, and freight type.

Q: What business structure should I choose?

M7 Tax: The most common entities for owner-operators are:

• Sole Proprietorship

• LLC

• S Corporation

Your choice affects liability protection and how your income is taxed. Selecting the right structure should be based on your specific business goals and financial situation.

Q: Should I buy or lease my truck?

M7 Tax: Most owner-operators either:

• Enter a lease-purchase program with a carrier, or

• Finance a truck independently through a lender

Lease-purchase offers lower upfront costs but delayed ownership, while financing gives you independence and eventual ownership without carrier restrictions.

Q: Should I run the spot market or lease onto a carrier?

M7 Tax: Many new owner-operators start by leasing onto a carrier because it provides load support and reduces upfront expenses.

As of 2025, the breakeven difference between leasing and running the spot market is approximately $0.48 per mile. If you can consistently earn more than that on the spot market, the switch may make financial sense—but it also comes with higher risk and less stability.

Q: How do I choose the right carrier to lease onto?

M7 Tax: Consider:

• Freight lanes and regions

• Type of freight hauled

• Pay structure

• Reputation and reliability

• Consistency of loads and on-time payments

Researching carriers thoroughly can prevent costly mistakes.

Q: How much does it cost to get your own authority?

M7 Tax: Running under your own authority comes with new expenses, including:

• Truck:

  • Lease: $1,600–$2,500/month

  • Purchase: $50,000–$200,000

• Trailer:

  • Lease: $500–$600/month

  • Purchase: $25,000–$50,000

• Insurance: $15,000–$30,000+ per year

• DOT & Operating Authority: $300 one-time

• BOC-3 Filing: $20–$40

• IFTA Decal: $10/year

• IRP Registration: ~$1,700/year

• UCR Fees: $59/year

• Drug & Alcohol Program: $75–$110/year

• Load Boards: $35–$150/month

We estimate you should be prepared for $30,000 in additional first-year costs, and approximately $50,000 or $0.48 per mile in added revenue to make the transition worthwhile.

Q: What insurance coverage do I need?

M7 Tax: Owner-operators with their own authority typically need:

• Primary liability

• Cargo insurance

• Physical damage

• Bobtail insurance

• Non-trucking liability

Those leased onto a carrier usually receive primary liability through the fleet but must still carry certain supplemental coverages.

Q: How much do owner-operators make per year?

M7 Tax: Income varies widely, but as of 2025, average net income for owner-operators is up to $64,000 annually, depending on operation type and cost control.

Q: How much should I pay myself?

M7 Tax: Your true “pay” is what remains after all business expenses are paid and taxes are set aside. Paying yourself a set amount doesn’t change what you owe in taxes—your taxable income is based on net profit.

Q: How does M7 Tax help owner-operators?

M7 Tax: We are specialized for helping owner-operators simplify their finances and maximize profitability. Our services include:

• Bookkeeping

• Accounting

• Tax planning and preparation

• Ongoing financial guidance

We work as a strategic partner—not just a tax preparer—so you can focus on the road while we handle the numbers.

👉 Want to learn more about how M7 Tax can support your trucking business? Reach out today and let’s build a smarter, more profitable operation.