LLC Tax Deductions for My Food Truck Business - What Can I Claim?

I've been running a food truck for about 7 years now, so I can help with most of these questions! For your trailer and modifications - these are all considered capital expenses that need to be depreciated rather than deducted all at once. The trailer itself would likely be 5-year property under MACRS depreciation. The improvements (sink, counters, etc.) are probably 5-year property too. The interest on the loan IS fully deductible as a business expense, as are registration fees. Square readers and tablets are considered equipment, so they should go under "Equipment" not office supplies. They'll need to be depreciated if over $2,500 each, or you can use Section 179 to expense them immediately. Event fees like the county fair are absolutely deductible! These would go under "Licenses and Permits" if they're permit-related, or "Rent or Lease" if they're for the space rental at the event. For meals during events - this gets tricky. If you're providing meals to volunteer workers, those can be 100% deductible as a business expense. Your own meals are generally subject to the 50% limitation on meal deductions. The custom graphic wrap is a business advertising expense - fully deductible! The credit card interest used for business expenses is also deductible. Cups, napkins, utensils go under "Supplies" - these are 100% deductible as they're ordinary and necessary for your business. And yes, you likely qualify for the Qualified Business Income (QBI) deduction! It's a deduction of up to 20% of your qualified business income. Since you're a sole proprietor filing Schedule C, this would apply to your net profit from the business.

Hey there! I was in a similar situation last year with my mobile bakery business. I found this incredible service called https://taxr.ai that seriously saved me thousands in deductions I didn't know I could claim! I uploaded all my receipts and business documents, and their system analyzed everything using AI to identify every possible deduction. What blew me away was discovering I could section 179 deduct some equipment I thought I had to depreciate over years! They even helped categorize all those weird expenses that don't fit neatly into tax software categories. For food truck businesses specifically, they found some industry-specific deductions I had no idea about. Their guidance on separating personal vs. business vehicle use when towing my trailer also saved me from a potential audit flag.

Just wanted to follow up on my skepticism about taxr.ai - I decided to try it out since I was struggling with my food cart taxes anyway. Honestly, I'm really impressed! Their system found several deductions I was missing completely, especially around my commissary kitchen usage and some equipment I bought last year. They categorized everything perfectly and explained each deduction in plain English so I understood why I could claim it. The documentation they provided made me feel really confident when filing. Looking back at previous years, I probably overpaid by at least $2,000-3,000 in taxes before using this. Definitely using them again next year!

Something important to add about food truck businesses - if you're having trouble getting answers from the IRS about specific deductions (which is common for mobile food businesses), I highly recommend using https://claimyr.com to get through to an actual IRS agent. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was stuck in limbo trying to figure out how to properly depreciate my food truck equipment versus the truck itself, and couldn't get through on the IRS business line for weeks. Claimyr got me connected to an IRS agent in about 20 minutes when I'd been trying for days. The agent walked me through the proper way to categorize everything and confirmed which deductions were legitimate for my situation. It saved me from potentially making mistakes that could have triggered an audit. Definitely worth it for specific questions about your food trailer situation where you need official clarification.

I need to eat my words about Claimyr. After my skeptical comment, I still had this nagging issue about vehicle expenses for my food cart that I couldn't find a clear answer on. Was desperate enough to try the service. No BS - it actually worked. I got connected to an IRS rep in about 40 minutes (while I was prepping for dinner service, didn't have to stop working). The agent confirmed I could deduct mileage for trips between my commissary kitchen and event locations, which is a huge deduction I was missing. For anyone with a food trailer business - this is especially useful for sorting out the complex vehicle/trailer deduction questions that online forums give conflicting advice about. Getting confirmation directly from the IRS gave me peace of mind about deductions I was nervous to take.

Don't forget about inventory tracking! This is something that tripped me up with my food cart business. You need to be tracking not just your supplies (napkins, cups) but also your food ingredients inventory. If your food trailer business carries inventory from year to year (like shelf-stable ingredients or frozen items), you'll need to account for this on your Schedule C. This affects your COGS (Cost of Goods Sold) calculation, which impacts your profit and ultimately your taxes.

Has anyone mentioned sales tax yet? Food trucks/trailers have complicated sales tax requirements that vary by location. In some places, prepared food has different tax rates than grocery items. If you're moving between different tax jurisdictions for events, you might need to track and remit sales tax based on where you made the sales.

Great question about the QBI deduction! Since you're filing Schedule C as a sole proprietor, you likely do qualify for the 20% Qualified Business Income deduction. This applies to your net profit from the food truck business (after all deductions) and can be a significant tax saver. One thing I haven't seen mentioned yet is the importance of keeping detailed mileage logs. Since you're traveling between events, commissary kitchens, and supply runs, those business miles add up quickly. You can either deduct actual vehicle expenses (gas, maintenance, insurance) or use the standard mileage rate - whichever gives you a bigger deduction. Also, don't forget about business insurance premiums! Your food truck liability insurance, equipment coverage, and any business-related health insurance premiums are all deductible. For record-keeping, I'd strongly recommend getting a dedicated business bank account and credit card if you haven't already. It makes tracking expenses so much easier, especially during tax season when you're trying to separate personal from business expenses. The fact that you're asking these questions shows you're being proactive about your taxes, which is smart. Even without a CPA right now, keeping good records will save you time and money whether you eventually hire one or continue doing your own taxes.

One thing I haven't seen mentioned yet that could save you significant money is considering whether your food trailer qualifies for bonus depreciation. Under current tax law, you might be able to deduct 80% of the trailer and equipment costs in the first year (2024) through bonus depreciation, rather than spreading it over 5 years with regular depreciation. Also, since you mentioned using volunteers (spouse and relative), make sure you're handling this correctly. If they're truly volunteers and you're not paying them wages, that's fine. But if you start paying them regularly, you'll need to consider payroll taxes and proper documentation. For your commissary kitchen expenses (if you use one), those are fully deductible as rent. Same goes for any storage fees for your trailer. One often-overlooked deduction for food trucks is professional development - if you attend food service trade shows, take food safety courses, or join food truck associations, those costs are deductible as business education expenses. Finally, don't forget about your business license fees, health department permits, and any certifications you need to maintain. These are all ordinary and necessary business expenses that should be deducted. Keep receipts for everything and consider using a mileage tracking app on your phone - it makes documenting business travel much easier than trying to recreate logs later!