[tankyanker]

as a lease driver, i received a weekly check with no withholding. i set myself up on quarterly irs payments (determined by the previous years earnings) so that i wouldn't have to scramble and come up with the money at the end of the year.

after buying my truck, i'm not so sure that this is really the best set up now? but the accountant i use says i should stick with the quarterly payment plan. i'd like to defer the payments, and do everything at the end of the year, so that all my write-offs and everything are taken into account. i'm seriously trying to build up my maint. fund right now and would rather put the money into somethin like that for now.

what do y'all do or recommend? i found an another accountant who works with some other o/o, but i haven't gone to see her yet. just wanted to get an idea of what some of you guys do first.

[Walking Eagle]

Couple of questions ? Is this your first year of owning your own truck, were you a company driver on miles before ? Has your "accountant" ever delt with trucking before ?
I have been and O/O for many years and always filed quaterly, based on what I lowballed I was going to clear, then at the end of the year had someone who really knows what they are doing do the full years taxes with all the deductions, depresiation etc. and always end up getting a nice check back (Normaly don't have to pay the last 1/4 either)
Just make sure you keep EVERY reciept, however small it is. I just have a box on the floor on the passenger side that says March, April, May etc. and everything goes in there and they all go to my tax lady at the end of the year

[no_worries]

I'm sure I'll get disagreements on this point, but they're wrong :lol:

The IRS requires that you estimate your annual income tax liability and then divide it into four equal quarterly installments. If your income fluctuates (as most truckers' does) you can elect to use the Annualized Income Installment Method. Using this method, you estimate your liability at the end of each quarter and make a corresponding payment. Therefore, your quarterly installment amounts differ. Some quarters you may not have any liability at all. If you choose this method, you must file Form 2210 with your income tax return.

The only way you can legally only make one payment at the end of the year is if you had no taxable income until the fourth quarter. Publication 505 explains this in detail and if you look at Form 2210, you'll get a sense of what's expected. Even if you pay all your tax at the end of the year, if you didn't make a quarterly payment when you should have, there are penalties. The penalty and interest amounts are spelled out in 2210.

Many drivers claim that you can simply pay all your taxes at the end of the year and not worry about quarterlies. Not true. However, the IRS obviously doesn't make it a high priority. Odds are, if your payments match your liability at the end of the year, you'll never get that letter. Then again... :lol:

[Dejanh]

Although NW has a point in certain things, for this year i decided to just scrape off paying it quarterly and just pay it all at the end.

It always comes up about the same and theres no point for me to pay an extra 100$ per quarter for my accounting fees,+ extra at the end just so that I can pay quarterly.

I also shut my INC. down as well and will report it all as personal.

At the very end, theres no difference between the two but this way am eliminating paperwork, fees and am reporting my full income as such because time will come when ill have to draw my pension....

[tankyanker]

it is my first year as an o/o. before march, i drove a truck that was owned by a family member and leased on to a carrier who pays by the load. as the driver, i received 25% of each load, 25% of what the truck grossed each week. the quarterly payments that i am making now as an o/o (i've made two so far) are set up on my income the previous year as a lease driver.

the accountant who set me up on this plan as a lease driver is a family friend. he works for a small co. that owns/leases, sells and delivers fuel to conv. stores. the company owns two trucks for the fuel delivery, but they are not really a 'trucking' co and the trucks are very small part of what he deals with. i think most of what he deals with there involves taxes on property sales, holdings and employee payroll. but he does not charge me to file the quarterlies and he only charges very little to do my stuff at the end of the year.

an o/o i know in a nearby town recommend another lady to me, and i thought it might be worth paying her more to do my stuff right as she is more familiar with trucking and handles the taxes of several o/o in my area. he said after taking his stuff to this lady, he started getting money back at the end of the year. i guess i don't mind paying in on a quarterly if i can get some back of the end of the year, but its hard getting started from nothing and i wanted to delay paying cash into the taxes as long as i could. it would be one less thing to juggle right now.

i bought an older truck, a fixer-upper i guess, and i keep all my receipts. i file them by month and then add them up to run them against what i grossed for the month, so i can get a good idea what % of my gross i am giving over to maint. and repair. sometimes it's depressing. lol.

[no_worries]

Dejan, you illustrate my point perfectly. Even though you're paying the same amount in total, if the IRS ever got a hair up its ass about you, they can ding you for penalties for not making quarterly payments. It's simply the rule. If you earned taxable income in the quarter, you must make a quarterly payment. But like I said, rarely does someone get busted just for that.

yanker, making four payments equal to what you paid in taxes the previous year is the simplest way to stay in compliance. Getting money back at the end of the year only means that you paid too much to start with. Trucking taxes are really not that complicated. The guy handling your taxes now might do just fine. Talk it over with him and find out how comfortable he is with doing them for you as an O/O. The only significant issues you have are depreciation and the M&I deduction. If he's on top of those, it's a piece of cake.

[Dejanh]

Originally Posted by no_worries

Dejan, you illustrate my point perfectly. Even though you're paying the same amount in total, if the IRS ever got a hair up its ass about you, they can ding you for penalties for not making quarterly payments. It's simply the rule. If you earned taxable income in the quarter, you must make a quarterly payment. But like I said, rarely does someone get busted just for that.
.

Oh i know, next year I will do quarterly but only as personal income.

They have to estimate it in comperison with the last year, and next year, this year will be last... :?

[no_worries]

Nothing like keeping the tax code simple, eh? :lol:

[tweety bird]

You are best to make your quarterly payments- but don't overestimate! A friend's accountant told him to pay some ridiculously high amount each quarter because that way he'd get money back. Please, if your accountant uses that logic, fire him/her and find someone else. Even if you pay too little for your quarterlies, you're better off. It's a guessing game.

If you wind up blowing the quarterlies, you will have penalties- which means you'll pay more than you should have. It's wasted money- but it's probably not going to kill you. I've done it. I'm still alive (but I think they're looking for me).

[Papa Rick]

Been driving for 10 years, O/O since Oct 06. I have never paid any quarterly taxes, and always get back some.

I pay my account person $60.00 per quarter, and then $150.00 to do my year end taxes. For this she does my IFTA reports, takes care of my Heavy Road Use Tax, gets my Truck Tag, etc.... .

But here is where I may differ than some people, in that I bought a 1985 Freightliner and a used log trailer and boy did they both cost alot in repairs and maintenance so therefore I could show more in repairs, and legal deductions than I brought in.

In 07, bought a 2003 W900L KW and got some more good tax breaks with this.

My accountant told me that I would have to show some profit for 08 or the IRS might start looking close at me. I asked him how much of profit, and he laughed and said $1,500.00 to $3,000.00

My advice would be find a accountant that deals with O/O and ask alot of questions.

I use Truck Pro for keeping up with everything, and when I go to see my accountant either quarterly or end of year, it is so easy.

I haul logs for a living so I don't have alot of the paperwork, (log books, per diem, etc....) that over the road drivers have to deal with, but record keeping is important if you ever get audited.

Find a Truck Driver O/O accountant and be glad to pay them, because it is well worth the money for the peace of mind.