Tax Write Off!!
 

If you write your fuel off on your taxes as an owner operator General How much will you see in return on your taxes. I just really want to know how much of my income should i hold back for my taxes. Is 35% of your income enough??

If you write your fuel off on your taxes as an owner operator ???? IF?
Are you sure you know how to run a business?

You should write off everything allowable, this would include, but not limited to fuel, repairs, motels, food, supplies, tolls, special licences, certain taxes, office expenses, depreciation of equipment.
Listed on the schedule C.
Depreciation worksheet.
And other schedules and worksheets you may need to use.
then your net income is what is taxed, and thats around 28% to 35% average.

A Bajillion zillion dollars !!!!

I project that another new O/O with NO BUSINESS skills will soon go down the drain....:rolleyes:

thanks for the help, but as for the sarcasm i have been wanting to do my own taxes and was curious. Some people don't know how to help someone in need. They only know how to be a smartass.

In all fairness, it was a pretty dumb question the way you worded it. There is no "if" when taking allowable deductions. No owner operator chooses to not write off their fuel expenses, unless they are an idiot or a hobby trucker who doesn't keep track of their numbers.

Well i worded it wrong, come on i wrote that a like 300am in the morning i was a little tired. But all and all do most of you hold back some cash for the taxes each quarter or do you have enough write off's to write it off, so that you don't have to pay in.

I pay $3,900 a quarter

Join the club.
No excuses for poor wording... sacracsm.
Pay in every quarter, you never want to be stuck in debt to the IRS.

And Yes I know....:p

Kennyg1983 you need to find a tax person that knows trucking, if there is not one locally you can find them on the web ! I was lucky and found a gal in my town that knew what she was doing. She got me straightened right out ! I Have a box that sits on the pass. side floor that right now has October on it, that any piece of paper I get from anything goes in. She takes it and gives me another that will say Nov.
Ahhhhh, is fuel a a cost of trucking, I think so. How long you been doing this ?????

i have driven for someone else for about 7 years and i got all the ropes tied up just not the taxes and i wanted everything about taxes to be in my head so that i knew what to expect!! Come tax time!!

REEEEEEEEEEEEEEAAAAAAAAAAALLLLLLY bad idea to do your own taxes. Get suggestions from other o/o for good accountants with trucking experience.

Not only will a good trucking accountant know the ins and outs of trucking taxes but it will save you a major headache. I always prepare my own receipts/expenses summary (I've had someone else do it- sent them all my receipts- but somehow things like cell phone, insurance etc always seem to fall through the cracks- which is bs imo) but I ALWAYS have an accountant prepare my taxes.

I don't know any o/o who has time to mess with that- and it's a real headache. Trucking taxes are the real deal- this isn't just a matter of holding back 30% and then sending that in every quarter. You'll wind up paying way too much. Plus, if you get audited, do YOU want to deal with the IRS? Or would you rather have an experienced accountant defending their own work?

A good tax accountant can advise you whether you need to incorporate (we were not incorporated for the first 5 years... until we had a massive tax bill due to a mediocre trucking accountant on that last year) and then we switched to an accountant with excellent truckign credentials who had us incorporate and that saved us tons of tax dollars. I can't really explain the details on that- but it worked for our situation. And that's the important thing- your situation will determine whether you should incorporate or not (not what other drivers tell you you should do).

Please don't fall for the idea that being incorporated will protect you in case you have an accident- if you are the one driving the truck, they can sue you directly even though you are incorporated so it's a moot point (I'll probably get an argument going now- but it's true).

Please, please, please don't jump into this o/o thing without knowing exactly what you're doing. I'd suggest waiting a few years... you'll likely find out that you make more money (to you) as a company driver than you would as an o/o. An o/o may make more gross but after expenses and taxes they generally come out behind unless they're really smart about how they run their business (and, in my experience, most aren't).

Sorry to offend anyone with that last statement, but if you'll read up on advice given here to new o/o I think you'll find that opinion is a recurring theme.

Agreed 100% with Tweetybird,

A good accountant is worth his/her weight in GOLD, considering the price of GOLD these days, that is a lot.

Q: Why do you think they always show the mob guys with accountants?

A: Even the criminals know how important keeping the books are.;)

Actually Tweety Bird someone can sue you twice, once as the driver and once as the corporation :( :( Been there, have the T shirt and bite marks to prove it.

well, that sounds like good advice. I am hauling for a guy right know that is about to give up hauling commercially. I am going to take over his hauling and add some to it. it is a local hauling gig to where we haul for the local elevators. Beans,corn, Bean mill, and or fertilazer for Souther States. The only bad part is that Southeren States Payes you a month at a time to where the other places pay per week or by the load. There is money to be made just not a lot of it but i am not in it to be a millionare just being on my on and making more then working in a factory.

There is no magic formula to making a go of it in this or any other business. If you want a figure to work with then I would hold back about 30%. Your self employment tax will run around 15% by itself. I don't mean that you should hold back 45% for both taxes, but 30%for both. If you are a sole proprietorship you will pay self employment tax on your net earnings. This is in addition to any income tax. Self employment tax is social security tax. It would be best to find an accountant who has trucking experience. It can make a difference when you have someone who already knows about this business. Everyone's situation is somewhat different. My taxes will be different than yours. No two people will have the same tax situation. That is why it would be good to have a tax person from the beginning. He or she can help you get things set up right from the beginning. If you have a good tax person then your tax bite should not be too great. One thing to keep in mind is this is one industry the IRS is specifically targeting.

GMAN is on target. He is figuring an approximate holding percentage based on NET revenue (total revenue minus expenses and deductions). Another way to estimate hold back for taxes is approx 8-10% of your GROSS revenues. A lot of accountants, including mine and ATBS, feel that after all is worked out in the final analysis you will pay approximately 8-10% of what your total revenues are in taxes. So... based on this, everytime the settlement check comes in, just take a look at what your total revenues are (do not factor in expenses) and set aside 8-10% of that amount and you will probably have the right amount available for the tax man.

As has been stated, everyone's tax situation is different, but this method is probably the easiest to get a handle on, especially for the new business owner. Let a good tax professional work out the details.

Just keep in mind that just spending money to get a deduction is not always wise. Why would you want to spend $1 to get a $.20 tax savings? Watch those expenses and try to only spend money on items that will make or save you money. Do not always spend money just to get a projected tax savings or to massage your ego. Then you will do just fine.

Kenny I think you're confused as to the value of a tax writeoff. It doesn't magically get you money back from the government. The only way you get money back, is if you gave them too much in the first place.

A writeoff works like this:

Say you made $140,000 in sales(gross revenue). And you spent $35,000 on fuel. The government allows you to reduce your taxable income via anything that is spent on the business.

So take that original $140,000 and "deduct" the $35,000 you spent on fuel. Now you're going to pay tax on $105,000 of income, instead of $140,000. There's nothing magical about this.

Now before you start thinking "oh great, so the government is paying for the fuel!" not so fast, in no way is anything free in business.

Your tax bill always goes down a portion of your writeoff. That $35,000 you spent on fuel might save you $10,000 in taxes(give or take).

great advice, i think i might have to use this guys truck that is going out of buisness for a while even though my credit is great the bank is telling me that start ups are really down right know and it is not looking good for me!!

I'm talking about when drivers tell you that if you incorporate, you can protect your personal assets from being sued- because they sue the corporation, not you. That's not true because, like you said, they can sue the corporation AND you. It's not a layer of protection like some guys say.

I have had ATBS do my taxes for the last 4 years..... it's quite simple since Schneider sends them all the info such as fuel purchases, insurance costs, ect ect. I did not OWE any money to the government for the 1st 3 years, but once I lost my depreciation on the truck, I paid $8500 on the 4th year.

This year I have been running under my own authority and still use ATBS but also bought a 2nd truck so now I have depreciation again.... they tell me I owe about $3500 a quater but I have been paying $5000 since I have the money available and figure I will just roll over the excess into next years taxes :)

My sympthies that you are using ATBS. They are one of the worst tax firms out there. Not only did they miss deduction after deduction when I was using them, but they were notorious for completely forgetting that they were even supposed to be doing my taxes. They repeatedly lost many of the receipts that I sent them, as well as neglecting to include expenses when actually filing.

The last year I was with them, they made 6 months worth of fuel receipts disappear, then claimed I owed about $10,000 in quarterly taxes.

The " messiah " of trucking Kevin Rutherford got another one.....:clap:

Did you buy a turbo3000 also or was it included in the so called " accounting services " ?????

I keep receipts for eveything and use Quicken, it costs forty bucks a year or so.

:bigclap::bigthumbsup:

With the improvements in tax software over the years, doing your own taxes as a small business isn't difficult at all. In fact, doing my taxes myself, and comparing them to the taxes that ATBS did for me, I was finding missed deduction after missed deduction on theirs.

They skipped every toll receipt I turned in. WTF.

Rev I'd love for you to call into the messiahs show some time, and explain all the grief with ATBS.

Set it up !!!

The sheeple will lose their minds !!!:lol:

To be honest, back before Rutherford sold off The Alliance to ATBS, his accounting firm did a lot better job. But once ATBS took over, things quickly went downhill. But even before the switch, there was a lot left to be desired.

new tax system
 

There is a new tax system in place that is very simple and you can do it yourself. the form only has 3 lines

Line 1, How much did you make?
Line 2, How much do you have left?
Line 3, Send it in.

I am curious as to what type of software some are using. There are several industry specific software packages available but I am talking more about other types of software, such as Quickbooks, Peachtree, Quicken, etc., There are other types of trucking software such as Truckers Helper, Easy Trucking, Trucknpro, etc., We have had brief discussions concerning some of the trucking specific software, but I would be interested in seeing how many people use other generic types of software and what you like or dislike about it.

I use a simple Excel spreadsheet. I have listed all the pertinent categories in a column, have another set of columns where I enter in the expenses and the totals are added up and maintained by quarter and grand total for the year. I already track my fuel in the same workbook, so that figure is automatically taken care of when I enter in my fuel information.
I used to send all of my receipts to my accountant, who would do the bookkeeping and tax filings. Problem was that this lady is getting on in years and I was afraid that at some point she’d die near the end of a tax year and I’d not have my receipts to take to another accountant. The bookkeeping is easy anyway, so I decided to save myself $75 a month and just do it myself. I just send her the totals of everything at the end of each quarter and she does the rest.
I can’t say enough about having an accountant who specializes in the trucking business. Jeanne (our accountant) has been doing trucker taxes since 1972. We have, knock on wood, never been audited and we seem to do very well with the amount we pay in taxes.
Also, Dave Ramsey’s “Endorsed Local Providers” are very good. I’ve been thinking about switching to the one in Paducah. He offers a “no audit” guarantee and will represent you at no charge if you ever are (assuming that you didn’t “forget” something to report to him).

An Excel spreadsheet can do the job for the most part, :thumbsup: but not everyone wants to or is able to create the macros to do the calculations or create the pivot tables to bring the information forward so it isn't user friendly for some.

I think Quicken is really more a personal finance use accounting software and is fairly user friendly. QuickBooks and Peachtree have versions with various degrees of "bells and whistles" and which version to use depends on your needs as well as your understanding of generally accepted accounting principals and tax laws.

Just acclimating yourself to some sort of software is the most difficult part, but it certainly pays off when the alternative is having to pay for that service. And..... no one takes care of your business the way you would. :)

HAHAHA...... I have not had ANY problems with ATBS, and I have been using them before he was even on XM.

I also have a 3000D on all 3 of my trucks and it actually helped with the MPG on them, other than that, it's just another write off and every little bit helps :)
I dont see how you can pass judgement on something you have never tried? And if you did buy one then isn't that being hippocritical?

Either way good for you :cool:

You'll have to explain that logic to me, how blowing money on garbage is better than paying taxes on money you can keep.

I guess you will understand when you jump up to the next income level bracket :)


Whats with this hard-on for Kevin Rutherford anyways?
Did he sleep with your wife while you were out of town or something?

here's the deal
 

I made a deal with one of the other o/o, we both have the same engine and he claims that the thing gave him over a mpg increase. we are going to take it off his and put it on mine for 2 months and see if either engine changes, if it doesnt make a difference, he buys me lunch, if it does work like he says and I get a least a mpg increase. I buy him lunch and keep his turbo 3000 and buy him a new one
let the games begin!!

Well, to quote your messiah Kevin, I'd rather pay taxes on money I can keep than spend money on a truck and never get to use it for myself.

1st off, i don't have a "messiah"

2nd, you don't know me or who I talk to or listen to

3rd, I think the guy has too big of an ego and I dont care for his show, and honestly I dont EVER.... and I mean EVER listen to the "Open Road" channel, I think it's stupid and a waste of space on XM.

Lastly, your quote makes absolutely no sense? if you spend money or a truck you drive everyday, isn't that "using" it for yourself?

Do you even drive a truck? You sound more like a broker to me than a fellow driver..... or maybe a dispatcher

Nope. That is being a slave to the truck. I'd much rather spend money on my life and pay taxes on it than waste it on my truck and not pay taxes on it. The ROI is much greater. So to claim that "oh well even if it doesn't work at least I won't have to pay taxes on the money" is simply being a slave to the truck. Throwing money away just to not pay taxes on it is a foolish business plan.