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Owning the wheel your records-of-duty status will do the trick, but if you’re using electronic logs you may need a printout for your records in case of an audit. Motels, parking fees and shower costs that aren’t reimbursed may be deductible. Don’t forget ATM or fuel card fees, and if your bank charges service fees for your business account, subtract those, too The timing of purchases can impact your business, too. Take steer tires, for example. A quality set can easily cost $1,000 including mounting and balancing. If the year is coming to an end and you’ve made a tidy profit that you’d like to reduce your taxes on, you’ll want to spend that $1,000 before the calendar runs out at the end of the year. That’s another $1,000 that you won’t have to pay the 25% or more tax on, since it’s no longer counted as profit. On the other hand, if you expect that your business will break even or even show a loss for the year, it might be better to hold off on that tire purchase until after Jan. 1, so the expense counts for the following tax year instead. You can make the same type of decision about needed repairs or other expenses, including the last fuel fill of the year. You may even be able to pay your insurance bill early so you can count the expense for the current calendar year — although paying that premium late is not an option. Don’t forget depreciation. Your truck, for example, loses value over time, and the IRS allows you to claim that loss against your earnings. Rather than claiming the purchase price as an expense in the year you bought it, you would spread that expense over the life of the asset, generally five years, so you would benefit from a tax deduction each year. Other types of property, such as phones, computers and even the garage you had built for the truck may be TAX TIP Save every receipt. If you purchase something online, save that receipt, too. Receipts for fuel, repairs, and maintenance and truck items are a no-brainer, but drivers often overlook smaller expenses that add up. deductible. However, the rules can be complicated. Unless you’re a tax expert, it’s wise to get professional help (an added benefit is that the cost of tax service is deductible, too). Let’s clear up one common misconception. Deductions for expenses can lower your tax burden — but you’ve still spent the money. “Writing off” an expensive purchase may mean saving the tax you would have paid on the money used for the purchase, but the cash is still spent. It does NOT mean that the item was free. If you don’t already have a tax advisor, find one. Don’t wait until tax time. A good tax professional can provide business advice that can help you minimize your tax obligation. Make sure your advisor knows the trucking business. While there are similarities with other business types, there are some unique characteristics in trucking that impact your tax liability. Discuss your business plan with your tax professional as early as possible. As a self-employed individual, you may be subject to making quarterly payments of your estimated income tax. Your tax adviser can help keep you in good standing with the IRS while keeping the payments as small as possible. If you wait until tax time, you might easily find someone that can complete tax forms for you, but you need to be confident that your advisor knows the trucking business and is taking advantage of every opportunity to save you money. Owning your own trucking business can be a rewarding experience, but just how rewarding may depend on how well you manage your expenses and tax liability. Editor’s note: The advice offered in this article is not that of an accountant or tax attorney. The intent of this article is to offer helpful tips — not apply tax law and accounting processes to every situation. 36 THE TRUCKER JOBS MAGAZINE | JANUARY/FEBRUARY 2021 WWW.THETRUCKERJOBS.COM
CDL-A COMPANY DRIVERS OTR and Midwest Regional Runs Abundant Miles, Competitive Pay, Impressive Benefits “I’ve been driving for 35 years, drove for many different trucking companies and I wish I had found Schuster first.” – Mark S, Schuster driver BENEFITS 4 Starting pay up to 51 CPM / Annual average xxxsalary of $75,000 4 5 CPM Monthly Driver Bonus 4 $1,250 Referral Bonus 4 Paid Orientation 4 Additional Pay Opportunities: Stop Pay, Border xxxCrossing, Hazmat, East Coast Pay, Layover & xxxDetention Pay 4 Health, Dental, Vision & Life Insurance 4 Matching 401k 4 2,500 - 3,000+ weekly miles 4 Paid Time Off 4 Pets & Riders Welcome 4 2018-2021 International Pro Stars - Equipped xxxwith APUs, Qualcomm, Pre-Pass Elite & Scanner xxx2022s are coming soon 4 No Touch Freight DRIVER REQUIREMENTS W CLASS A CDL W 6 MONTHS EXPERIENCE W GOOD DRIVING RECORD/STABLE WORK HISTORY 888-873-1957 thetrucker.com/schuster
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