Are people making a profit after taking out for taxes?

wesaypop · Sep 12, 2014

Hi all,

I'm brand new to all of this. Throughout my googling I found this community.

I have a class B and have worked the last 4 years as a ST driver. I was regional, but had a set route for the week.

The company I was working for shut down the Chicago location I was working out of, leaving me unemployed. I was paid by the hour with benefits. All gone.

A truck driver friend of mines told me about expedited straight trucks and to give them a try. I have since gotten hired (today actually) with a company as an independent contractor. The straight truck I'll be driving has been modified to have a sleeper in it. Quite cool how they did it lol.

The guy I'll be driving for told me his drivers consistently make over $1000 a week. And a few make $5000 a month.

But once I got home, my wife and I started working the numbers with taxes and all. Doesn't seem like I'll be making much at all. Minimum wage at best.

My question to you all is do you still make a good living even while setting aside 35-40 percent for taxes?

I'm a bit discouraged before even starting lol. I don't know if I'm doing the numbers wrong or what.

Thanks for reading and have a great day.

fastman_1 · Sep 12, 2014

It looks bad on paper, but after all your deductions you'll make slightly above minimum wage

wesaypop · Sep 12, 2014

Thanks for responding. I really think it's terrible how they do truck drivers--Semi and straight trucks alike. We really should earn a lot more for such a necessary service.

davekc · Sep 12, 2014

I think unless you have the actual numbers, it is too hard to make any kind assessment. I can assure you, I don't have anyone running at minimum wage or anything close to it.

Daffyduck528 · Sep 12, 2014

I personally don't ever come close to 35% on my tax rate. You may want to get a CPA, because between per diem and all the deductions the irs gives you your tax rate will probably drop too. An IC is a small business so you do your taxes as a small business and start writing things off and taking deductions never available to you before.

fastman_1 · Sep 12, 2014

Daffyduck528 said:
I personally don't ever come close to 35% on my tax rate. You may want to get a CPA, because between per diem and all the deductions the irs gives you your tax rate will probably drop too. An IC is a small business so you do your taxes as a small business and start writing things off and taking deductions never available to you before.

Best advice I ever got was, get a tax man that knows trucking.

Daffyduck528 · Sep 12, 2014

fastman_1 said:
Best advice I ever got was, get a tax man that knows trucking.

Yes. Good point. I forgot to say that. The trucking deductions are very different than a regular small business so a typical CPA may not be much help. Verify that they work for others in the trucking industry and have a good rep.

jamom123 · Sep 12, 2014

I use ATBS tax service. It cost you monthly but they know what there doing. Check them out.

Sent from my SCH-I500 using EO Forums mobile app

Daffyduck528 · Sep 12, 2014

Frank Katz is a member on here. He helps a lot of people out with these tax issues as well.

wesaypop · Sep 13, 2014

Hey everyone, thanks so much for your responses and advice. I'm probably jumping the gun by worrying about taxes this early. I've never worked as an I.C before.

All of this is happening so fast, I responded to an add on craigslist, and 4 hours later I was taking a drug test and being shown which truck I would be driving lol.

There is no training, all I know is that runs will be emailed to me. So much to ask, but I don't want to stray away from the original topic, so i guess I'll have to make a new thread if I don't find what I need in the search results.

Again, thanks everyone for the advice, I will be following up on them.

mjmsprt40 · Sep 13, 2014

You're on quite a learning curve now. Some find it hard to dump the "Employee" mindset-- especially if they've been union before-- and learn that life as an I.C. is a completely different sort of thing.

You're driving somebody else's straight-- that's a good start. You get to learn the business and decide if expedited is for you before making the capital investment in your own truck.

DRIVERDUDE · Sep 13, 2014

I may not be doing it right but I gross a decent amount every month and after expenses I have a decent amount left for me. When I do my taxes at the end of the year and write off my mileage, hotels, phone and other expenses I seem to have a negative taxable income on my return. Since that cuts into my wife's income, we always get back a large refund or pay NO tax at all. I find no need to put back money for taxes, I just increase my savings. That scenario works great for taxes but it really sux if you want to borrow some money since they look at your "taxable" income. But who needs debt anyway?

Daffyduck528 · Sep 13, 2014

DRIVERDUDE said:
I may not be doing it right but I gross a decent amount every month and after expenses I have a decent amount left for me. When I do my taxes at the end of the year and write off my mileage, hotels, phone and other expenses I seem to have a negative taxable income on my return. Since that cuts into my wife's income, we always get back a large refund or pay NO tax at all. I find no need to put back money for taxes, I just increase my savings. That scenario works great for taxes but it really sux if you want to borrow some money since they look at your "taxable" income. But who needs debt anyway?

Some of us like debt. It's like a warm blanket on a cool night while on the porch swing.

wesaypop · Sep 13, 2014

DRIVERDUDE said:
I may not be doing it right but I gross a decent amount every month and after expenses I have a decent amount left for me. When I do my taxes at the end of the year and write off my mileage, hotels, phone and other expenses I seem to have a negative taxable income on my return. Since that cuts into my wife's income, we always get back a large refund or pay NO tax at all. I find no need to put back money for taxes, I just increase my savings. That scenario works great for taxes but it really sux if you want to borrow some money since they look at your "taxable" income. But who needs debt anyway?

Hi there, are you tt or st? And do you own it? Naturally I'm interested in purchasing a truck (a straight truck) but not in a hurry for it.

wesaypop · Sep 13, 2014

mjmsprt40 said:
You're on quite a learning curve now. Some find it hard to dump the "Employee" mindset-- especially if they've been union before-- and learn that life as an I.C. is a completely different sort of thing.

You're driving somebody else's straight-- that's a good start. You get to learn the business and decide if expedited is for you before making the capital investment in your own truck.

Yeah this is quite a crash course for me. I'm already used to being away from home, and driving long distance, so I'm hoping to adjust this smoothly.

runrunner · Sep 14, 2014

DRIVERDUDE said:
I may not be doing it right but I gross a decent amount every month and after expenses I have a decent amount left for me. When I do my taxes at the end of the year and write off my mileage, hotels, phone and other expenses I seem to have a negative taxable income on my return. Since that cuts into my wife's income, we always get back a large refund or pay NO tax at all. I find no need to put back money for taxes, I just increase my savings. That scenario works great for taxes but it really sux if you want to borrow some money since they look at your "taxable" income. But who needs debt anyway?

What about Self employment tax? That goes to Social Security.

cheri1122 · Sep 15, 2014

wesaypop said:
Hey everyone, thanks so much for your responses and advice. I'm probably jumping the gun by worrying about taxes this early. I've never worked as an I.C before.

All of this is happening so fast, I responded to an add on craigslist, and 4 hours later I was taking a drug test and being shown which truck I would be driving lol.

There is no training, all I know is that runs will be emailed to me. So much to ask, but I don't want to stray away from the original topic, so i guess I'll have to make a new thread if I don't find what I need in the search results.

Again, thanks everyone for the advice, I will be following up on them.

ATBS is worth the small cost, they'll keep you out of [tax] trouble, and let you focus on learning how to run your own business.
I drive [s/t] for a fleet owner, am not interested in being an owner, and wouldn't stay with expediting for a week if it paid minimum wage, lol. There's a lot of good times, but some real frustration involved, too. This site will be your best resource - well, behind the atlas, GPS, 'Next Exit' book, and whatever apps make your work easier. If you have questions, people will try to help, because most of us can remember when we were starting. And most of us still have a question now & then, because there's always something we haven't seen before.
Good luck, and have fun with it!

DRIVERDUDE · Sep 15, 2014

To wesaypop I drive a CV. As far as SE tax you don't pay it if you have "no taxable" income. Ever heard of an IRA for retirement?

Therion · Sep 15, 2014

wesaypop said:
Hi all,

I'm brand new to all of this. Throughout my googling I found this community.

I have a class B and have worked the last 4 years as a ST driver. I was regional, but had a set route for the week.

The company I was working for shut down the Chicago location I was working out of, leaving me unemployed. I was paid by the hour with benefits. All gone.

A truck driver friend of mines told me about expedited straight trucks and to give them a try. I have since gotten hired (today actually) with a company as an independent contractor. The straight truck I'll be driving has been modified to have a sleeper in it. Quite cool how they did it lol.

The guy I'll be driving for told me his drivers consistently make over $1000 a week. And a few make $5000 a month.

But once I got home, my wife and I started working the numbers with taxes and all. Doesn't seem like I'll be making much at all. Minimum wage at best.

My question to you all is do you still make a good living even while setting aside 35-40 percent for taxes?

I'm a bit discouraged before even starting lol. I don't know if I'm doing the numbers wrong or what.

Thanks for reading and have a great day.