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Don’t cheat yourself on tax deductions
April 1, 2011
| by: Max Kvidera
Tax Time
As a self-employed driver, most expenses related to running your business are tax deductible
Most people think about taxes in April, but as an owner-operator, you should be thinking about your taxes every month.
Your tax obligations include federal and state income taxes. As an owner-operator, you’ll be required to pay estimated taxes each quarter, and you are responsible for setting aside funds for taxes. “We see almost every day a new owner-operator who hasn’t set up automatic withholding, and all of a sudden at tax time they owe [thousands], and they don’t have it,” says Dennis Bridges, a CPA and tax preparer.
You’re also responsible for self-employment tax based on net earnings. If you have a second truck and employ a driver, you’re responsible for employee payroll taxes for federal and the state where you’re based, says Perry Wiseman, owner of Truckers Accounting Service.
Using Form 2290, you must pay the annual Heavy Road Use Tax. The $550 fee covers trucks weighing more than 55,000 pounds and is due by Aug. 1 for the July 1-June 30 period.
You also face fuel and mileage taxes under the International Fuel Tax Agreement (IFTA). If you’re leased to a carrier, the company might handle the payments.
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Don’t scare a person who is attempting to better themselfs and trying to become a business person as a truck operator. Offer something positive and don’t be so negitive.
Trucking today is tough. I am unemployed due to complications of another sort. However if a driver wants better home time make more money keeping good records is the key to success and also the key to better trucking for all.
1) The fact that the motor home has bathroom and slnpieeg facilities means that it could qualify as a 2nd home (assuming that it also has dining facilities). If it qualifies as a 2nd home, the interest paid can be deductible as mortgage interest. As you are not paying any interest, there is no deduction.2) You may be able to deduct the sales tax if you itemize and you choose to deduct your state and local sales taxes instead of your state and local income taxes. You add them both up, and deduct the greater amount (but not both). Note: If Congress does not act, this deduction goes away and will be unavailable for 2010. This deduction is quite popular and I expect it to be extended but you never know with Washington.