How Much Should Owner-Operators Set Aside for Taxes?

The Short Answer: 25–30% of Net Profit

Set aside roughly 25–30% of your net profit — what's left after business expenses like fuel, insurance, truck payment, and maintenance — for federal taxes. The exact percentage depends on your total income, filing status, and whether your state has income tax, but 25–30% keeps most single-truck owner-operators in the clear.

If you're pulling in higher gross revenue or you have significant personal income on top of your trucking income, bump that number toward 30% to be safe.

Why the Number Is Higher Than You Expect

When you work for someone else, your employer pays half of your Social Security and Medicare (FICA) taxes. As a self-employed owner-operator, you pay both halves — that's the self-employment (SE) tax, which runs about 15.3% on your first $160,200 of net self-employment income in 2026, and 2.9% on anything above that.

Stack SE tax on top of your regular federal income tax, and you can see why April surprises drivers who thought they'd had a good year. Good news: you can deduct half of your SE tax when calculating your adjusted gross income, which takes a bit of the sting away.

Quarterly Estimated Tax Payments

Self-employed people don't have a paycheck to withhold from, so the IRS expects you to pay as you go through quarterly estimated payments. The 2026 deadlines are:

Q1 (Jan–Mar income): April 15, 2026
Q2 (Apr–May income): June 16, 2026
Q3 (Jun–Aug income): September 15, 2026
Q4 (Sep–Dec income): January 15, 2027

Miss these and you'll owe underpayment penalties even if you pay everything by April 15. The safest approach: open a separate savings account labeled "Tax," move your set-aside percentage every time you get a settlement or payment, and cut your quarterly check from that account. It's never your money to begin with — treating it that way from the start removes the temptation.

The Deductions That Actually Move the Needle

Clean books are what make deductions real. Here are the expenses that matter most for owner-operators:

Truck payment and depreciation: If you're making payments, the interest is deductible. If you own the truck outright, you can depreciate it over time or take a Section 179 deduction in the first year.
Fuel: Every gallon, properly documented. Fuel card reports make this automatic.
Insurance: Cargo, liability, and bobtail insurance are all deductible business expenses.
Maintenance and repairs: Tires, oil changes, brake jobs, DOT inspections — all of it.
Permits and licensing: IFTA, IRP plates, MC authority fees, UCR.
Per-diem for days away from home: Currently $69/day for overnight travel away from your tax home. You don't need receipts — you need a log showing you were away.
Phone, ELD, and work subscriptions: The business-use portion of your phone, your ELD subscription, DAT or TruckStop load board fees.
Tolls and scales: Every toll receipt, every scale fee.
Factoring fees: If you use a factoring company, their fees are a deductible business expense.

The difference between tracking these and not tracking them can easily be $8,000–15,000 in deductions on a solo truck. At a 25% effective tax rate, that's $2,000–3,750 back in your pocket.

LLC vs. S-Corp: Does Entity Structure Matter?

For most single-truck owner-operators, a single-member LLC is taxed the same as a sole proprietor — you file a Schedule C and pay SE tax on all your net profit. Once your net profit consistently clears $50,000+, it may be worth talking to a tax professional about an S-Corp election, which can reduce SE tax on the portion of income you pay yourself as distributions rather than wages. It adds complexity and payroll requirements, but the tax savings can outweigh the cost at higher income levels. See our post on LLC vs. S-Corp for owner-operators for the full breakdown.

What Good Books Do For You

Your set-aside percentage is only as accurate as your books. If your QuickBooks is a mess, you're either over-setting-aside (leaving money you could use on the road) or under-setting-aside (setting yourself up for a painful April). Keeping clean monthly records means your set-aside number is based on real net profit, your deductions are captured automatically, and your quarterly payment is a five-minute exercise instead of a tax-season scramble.

That's exactly what the Advantage and Full Service plans at Accounting by Jay are built to handle.

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General information, not tax or legal advice — see our disclaimer.