Should you incorporate?
Truck drivers decide to incorporate for a numerous amount of reasons; there are several business entities to consider when incorporating, which may include a Corporation, LLC (Limited Liability Company), and S-Corporation. The most common reasons truckers decide to incorporate include the possibility of “tax savings” and to obtain “limited liability”.
What are estimated taxes and when are they due?
Estimated taxes are payments made to both the IRS and the state to reduce the possibilities of owing taxes at the time of filing your annual tax return. Additionally, the payment of estimated will ensure you do not pay and interest and/or penalty fees.
Estimated taxes for are due on the following dates: First Payment – April 15 Second Payment – June 15 Third Payment – September 15 Fourth Payment – January 15
How long should you keep business records?
Based on the statue of limitations, the IRS has up to 3 years from the date you filed your income tax return to conduct an audit to access additional tax. Therefore, it is crucial that you keep all your records for at least three years. However, there are a few exemption to the 3-year limit which include the following:
Keep records for 6 years; if you did not report income that you should have reported, and it is more than 25% of the gross income shown on your return.
Keep records indefinitely; if you did not file a return or you filed a fraudulent return .
Keep records for 7 years; if you filed a claim for a loss from worthless securities or bad debt deduction.
Keep all employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.
As a truck driver, what types of deductions are you entitled to receive?
There are may deductions available to truck drivers, whether you are a company driver or a owner operator. Due to this, it is recommended for you to seek an industry specialist. This will ensure you are taking advantage of as many available deductions as possible and are correctly applying the tax code to the transportation industry. In addition to having a large quantity of deductions available, truckers are subject to special rules and have a wide range of allowances.
Some of the most disregarded deductions include Per Diem Allowance and Travel Expense.
However, always remember that keeping your records is a fundamental key to being able to take any deduction. So please keep all supporting documents to ensure that your certified public accountant can utilize them to your advantage.
What are 2290 payments and when are they due?
Heavy Highway Vehicle Use Tax Return, also known as Form 2290 (includes Schedule 1), is filed annually for the period of July 1st through June 30th by mail or electronically for a vehicle that is 55,000 pounds or more in gross weight (IRS promotes electronic filing for all taxpayers; however, if you are reporting a quantity of 25 vehicles or more, you must file electronically and not by mail). The owner of the vehicle (truck) is responsible for filing this return and making a prompt payment for the tax amount due. Due dates will vary depending on which month the vehicle was first used for new vehicles ; generally the due date is the last day of the month after it was first used. Subsequently, your due date will be August 31th.
An extension may be granted for no more than 6 months, if requested prior to your due date.
Are “deadhead” miles deductible on my Tax Return?
The IRS does not grant truckers any deductions, credits or allowances for “deadhead” miles and “lost revenue”. For the reason that you are already claiming a deduction for 100% of the operation cost (ex. fuel, tires, repairs), this type of deduction is not permitted.