New Tax Law Offers Year-End Planning Opportunities for Trucking Companies

This article was originally published in the Fall 2025 edition of the Georgia Motor Trucking Association (GMTA)'s magazine, TRUX.

As we enter the final months of 2025, economic uncertainty remains. However, the newly signed One Big Beautiful Bill Act (OBBBA) provides some much-needed clarity on the future of income and estate tax law. With just a few months left in the year, now is the perfect time to review which tax planning strategies and accounting matters may warrant your attention.

Some Trucking Companies’ Revenue is Improving, While Others Hang On

Trucking companies are generally seeing an increase in revenues in 2025. Because many transportation and logistics companies utilize the cash basis of accounting for tax purposes, this uptick in revenue may lead to the deferral of income as accounts receivables increase. In layman’s terms, electing cash basis of accounting is a mechanism used to defer income taxes to future years and preserve cash for business operations, equipment purchases and debt service. For companies with growing top-line revenue, this is an excellent tax strategy.

However, if your revenues continue to slow through year-end, a decrease in accounts receivable may actually result in higher taxable income.

Under either scenario, we recommend working with your CPA to perform a projection of your taxable income before December 31, 2025. This allows time to make any necessary adjustments and helps mitigate a surprise tax payment to Uncle Sam. More on this later.

What Does the OBBBA Mean for Taxes?

The OBBBA extends or enhances many of the advantageous provisions from the Tax Cuts and Jobs Act (“TCJA”). Several of these provisions have been made permanent.

Extensions of the Current Tax Law

For pass-through entities, the top provision extensions include the extension of current tax rates, qualified business income deduction and pass-through entity tax.

The income tax rates enacted under the TCJA were made permanent. Therefore, the highest tax rate remains 37% (compared to 39.6% if the law had not been enacted), and the 20% deduction of qualified business income has been made permanent. This was originally set to expire on December 31, 2025.

The ability for pass-through entities to pay the state income tax at the corporate level was not impacted, allowing individuals and trusts that own pass-through entities to continue to receive a state tax deduction by having the entity pay the state income tax.

Enhancements of the Current Tax Law

The deductions related to bonus depreciation, Section 179 expensing and changes to the 163(j) deduction should benefit most transportation companies, enabling the acceleration of deductions for equipment purchases and reducing any limitation on the deductibility of interest.

Bonus deprecation under the TCJA was previously set to 40% for 2025. The new OBBBA reverts bonus depreciation to 100% and makes it permanent, allowing for most fixed asset purchases (excluding nonresidential property) to be depreciated in the same year as purchase.

The Section 179 expense limitation for 2025, previously set to $1.25 million, will now increase to $2.5 million and be adjusted for inflation in future years. The phaseout of the Section 179 expense threshold has increased to $4 million. Therefore, if your company has fixed asset purchases that are less than $4 million, you will be able to expense up to $2.5 million in the current year (subject to a taxable income limitation).

If your company was subject to an interest expense limitation under 163(j), the TCJA law only allowed an addback of interest and taxes when computing the interest expense limitation. The OBBBA allows an addback of depreciation and amortization expenses for 2025 and beyond. For asset-heavy transportation companies, this adjustment enables more interest to be deductible in the current year.

Employee Impacts

Employees of transportation companies that are paid overtime may now be exempt from federal taxable income for up to $12,500 ($25,000 for joint filers per year). There is an adjusted gross income phaseout for high earners ($300K for MFJ and $150K for all others), but many employees may be eligible. Guidance is expected to be issued to confirm that transportation entities will qualify for this change. Employers will have additional reporting requirements on employee W-2s, and overtime pay will still be subject to payroll taxes and, potentially, state income taxes (unless states agree to conform to this change).

Individual Updates

There have been several favorable (and a few unfavorable) changes to the individual tax law as well. Increases to the state and local tax deduction, the ability to deduct car loan interest (subject to income phaseouts), and the child tax credit may help you and your employees lower your income tax liability. However, itemized deductions may be subject to a small limitation if you meet certain income thresholds.

Estate Tax Updates

Many business owners were reviewing and updating their estate plans in response to the potential expiration of the increased exemption amounts under the TCJA (currently $13.99 million per person). These amounts were set to expire on December 31, 2025, and the new exemption amount was estimated to be approximately $7 million per person in 2026. However, beginning in 2026, the lifetime estate and gift tax exemption will rise to $15 million per person and be adjusted annually for inflation.

Navigating the New Tax Law – Year-End Planning

If your trucking company needs additional tax planning strategies before year-end to help minimize income taxes, consider the following:

1) Purchase equipment before year-end to take advantage of the updated bonus depreciation and Section 179 rules.

2) For cash basis taxpayers, prepay expenses or pay down payables to defer income into 2026.

3) For accrual basis taxpayers, prepay expenses or accrue bonuses to employees. If bonuses are paid by March 15, 2026, they are deductible in 2025.

4) Continue pass-through entity tax payments to maximize state tax deductions (especially if you are exempt from the increased individual state and local tax deduction).

5) Explore tax credits, including the retraining and jobs tax credits, to help offset your state tax burden. Many states also have credits for purchase, including Film tax credits, Low Income Housing tax credits and others to reduce your state tax burden.

6) Review and update your estate plan to take advantage of the increased exemption amounts.

The Last Mile

The final months of the year present an opportunity to proactively evaluate your tax situation before year-end and help you develop strategies for minimizing taxes. If you need help assessing which tax, cash flow and financial strategies are right for you, reach out to our Transportation team and set your company up for success in the new year.